Georgetown University has fired back at law school alum Scott K. Ginsburg, a Texas millionaire. In an answer and counterclaim filed in Dallas federal court on April 9, the university alleges that Ginsburg breached a contract and owes $9 million in pledged donations to Georgetown University Law Center, his alma mater.
Ginsburg had filed a complaint about a month earlier, seeking to recover $7.5 million in donations. He sought recovery, he alleged in his March 4 complaint, because the school had balked at naming a fitness center after him despite its contractual obligations to do so. In his complaint in Scott K. Ginsburg v. Georgetown filed in the U.S. District Court for the Northern District of Texas, Ginsburg alleged that the law school reneged on a naming-rights agreement reached in 2000 after he was found civilly liable for insider trading. [See "Wealthy Donor Taps Trey Cox for Fight Against Georgetown University Law Center," The National Law Journal, March 11, 2013]
But in its answer and counterclaim, Georgetown denies Ginsburg’s allegations and states they are barred because he and the school orally modified a March 30, 2000, agreement in 2002, then entered into a second agreement in 2003 that superseded the initial agreement and "eliminated the naming condition."
Georgetown’s counterclaim alleges that "Ginsburg still owes Georgetown approximately $9 million" under a 2003 gift agreement. The counterclaim states that "[A]lthough the school intended to comply with the 2000 agreement naming conditions," a federal jury in a civil case found Ginsburg liable for insider trading in 2002 and Georgetown became "concerned about naming a new facility on the Law Center campus after someone found liable for insider trading. . . ."
As a result, the counterclaim states, Georgetown offered to cancel "Ginsburg’s pledge and return his money," but he refused that offer.
"He said he believed in the project and did not want his legal problems to slow the Law Center’s progress, and agreed to waive the naming condition," the counterclaim alleges.
It continues, "For the next decade, Mr. Ginsburg and Georgetown continued to have a positive and productive relationship. Most significantly, in 2003, Mr. Ginsburg made an additional $11 million pledge to the Law Center. In addition, in October 2006, Mr. Ginsburg donated another $1 million to help the Law Center purchase real property adjacent to the Law Center campus."
Trey Cox, a partner in Dallas’ Lynn Tillotson Pinker & Cox, who represents Ginsburg, disputes the scenario Georgetown’s answer and counterclaim describes.
"If they want to sue their donors, they can do that, but they didn’t honor their agreement," Cox says.
He says Georgetown sent Ginsburg a draft of a modified contract but his client "did not sign it." He says that Georgetown’s filing of the counterclaim "is purely strategic. They are trying to push back and put something at risk," for Ginsburg. But, he says, "There is no document to support their theory of the case."
It wasn’t until February this year that Ginsburg "abruptly changed course and, for the first time since at least 2004, expressed concern that the Sport and Fitness Center had not been named for him," the counterclaim states.
Bruce D. Oakley, a partner in Hogan Lovells in Houston who represents Georgetown, did not return a call seeking comment.