Saint Joseph's College in Rensselaer, Ind., which shut down in 2017, accepted more than $1.3 million for renovations to its student center while concealing the school's dire financial problems. a lawsuit contends.
The Lafayette Journal & Courier reports that the food service company Sodexo accuses the college and its leaders of fraud and breach of contract. The suit seeks $1.3 million and additional punitive damages from the college.
"Had Sodexo been apprised of the severity of the college’s financial challenges — information that defendants deliberately withheld from Sodexo — it would not have paid to renovate the student center," the suit states.
The college shut down in May 2017 after accumulating a multimillion dollar deficit and facing the risk of losing accreditation.
Sodexo had provided $1.35 million to the school to renovate its student center. In exchange, the school extended its agreement to have Sodexo manage and operate the school's food service. That agreement was to last until 2029, according to the lawsuit.
The lawsuit alleges that the college and its leaders – former President Robert Pastoor and former Controller Spencer Conroy – were well aware of its dire financial situations and uncertain future when they asked Sodexo to pay for the student center's renovation.
For instance, the lawsuit says, the college should have let the company know that the college offered deep, unfunded scholarships to students and that the college had deferred maintenance for more than 15 years and was unable to budget for them.
The renovation was substantially completed in January 2017, days before the school publicly said it needed $20 million in commitments by June, according to the lawsuit.