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Welcome Message from the President
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A Letter to the Chairman
On August 10, 1979, I wrote to Lee Corcoran, Chairman of the Board of the Potomac School of Law. Corcoran, then executive assistant to the United States Secretary of Agriculture, had not attended the aborted emergency board meeting on August 8. I wasn’t sure why.
After pointing out that the school was $400,000 in debt; had less than $5,000 cash in the bank, and that its directors’ liability policy had lapsed for non payment of premiums, I issued this caveat:
“Under the critically emergent conditions, any board member who fails or refuses to attend the meeting of the board thereby preventing a quorum and frustrating corporate action would be especially vulnerable to suit.”
The rump board meeting had decided to call a proper meeting for August 16. I had a previous commitment and couldn’t attend. So my letter detailed for the chairman a number of steps which I thought the board should take on the 16th.
First, the school had no official corporate minute book. There was no way to determine what actions had been taken by the board, when they were taken, and by what vote. I recommended that Jeff Petrash of the firm of Dickinson, Wright, et. al., be named corporate secretary, and that he be directed to reconstruct a minute book as nearly as possible from whatever records he could find.
As far as I could tell, Potomac board meetings, in contrast to Cooley’s, were conducted in an open forum atmosphere, without agendas or parliamentary discipline. I recommended that Paul Thomas, of the Herrick and Smith law firm, be appointed legal counsel to the school; that he be requested to attend board meetings and advise members of the legal consequences of actions taken or failures to act.
I reminded the chairman that Monday, August 20, was registration day at the school and that something like two or three hundred thousand dollars might be paid in by students as tuition for the upcoming semester. If that money is commingled with general school funds, I warned, it would be reachable by a swarm of irate creditors, leaving Potomac unable to meet payrolls and other current operating expenses.
I recommended that a trust account be established at Riggs Bank into which all advance tuition would be paid, and that the trustee be directed to release only such funds to the school as were earned by the actual conducting of classes.
My letter went on to suggest that members of the board might be exposed to civil liability if they failed to adopt a budget and authorize the school’s officers to incur expenses within budgetary guidelines. I proposed that the president be instructed to prepare a budget for the fiscal year beginning September 1, and that a special meeting of the board be convened on Tuesday, September 11, 1979 to consider and act upon that budget.
I urged Corcoran to put before the board a proposal for a bond issue in the amount of $1,500,000. The bonds would be in $500 denominations; they would bear interest at a market rate, which would be paid in monthly installments; that each year, 10% of the bonds, chosen by lot, would be retired; and that the bonds be used to pay past obligations of the school and provide working capital. Then I wrote:
“The management agreement, which you sent to me, has been signed by six other members of the Potomac Board and by myself for Cooley Law School. I am assuming that the Potomac Board will, in furtherance of that agreement, elect me to membership on the board and name me chairman, president, and chief executive officer of Potomac School of Law on August 16. If that action is not taken, I will consider the agreement null and void, both as to myself and Cooley Law School.”
I then concluded:
“One final matter. I expect that the issue of compensation for the current president of Potomac will be raised and considered at the August 16 meeting.
“The members of the board are better able than I to judge the value of Dr. DiPietro’s services to the school since January. He has certainly tried. I am given to understand that he has drawn $2,500 per month during this time. While there was no board authorization for such withdrawal, I do not feel that $2,500 is an inordinate amount. If the audit verifies that this, indeed, has been the amount he has drawn during 1979, I would recommend that the board ratify his action and confirm such draw to him as compensation for his services.
“The payment of an additional sum in recognition of past services is presently impossible by reason of the insolvency of the corporation. The use of unearned tuition trust funds for that purpose could very well be considered a criminal act under present circumstances."
I then recommended that the board adopt an appropriate laudatory resolution and present it to Dr. DiPietro, and closed by saying:
“I will be playing golf in the Walnut Hills Country Club Annual Member-Guest Invitational Tournament from Wednesday, August 15 through Saturday, August 18. My secretary will be on vacation. I can be reached through the Cooley switchboard, or at my home number."
Copies of my letter went to both Potomac and Cooley board members.
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This Page was last updated on:
07/10/2006