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Welcome Message from the President
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September on the Potomac
In September of 1979, I assumed the presidency of the Potomac School of Law. Among my first tasks was to take physical possession of the president’s office and the check book.
The office did not live up to the posh ambiance of the Watergate complex, but it was adequate. The check book was a disaster. On the day I took over, Dr. DiPietro’s record showed the school as being more than $9,000 overdrawn at the bank. I very soon found out that the registrar was sitting on an additional $7,000 check to the IRS for withholding taxes.
One of my first acts was to summon the faculty into an emergency meeting. I wanted them to know the truth about where we stood and what I was planning to do about it.
About six professors showed up. A seventh arrived late, explaining that she had to take her cat to the hospital. It struck me that she was not exactly into the crisis mode.
I told the faculty that, in order to operate in the black, I was going to have to recommend to the board that two faculty positions be dropped, unless they could agree to cut payroll by $13,000 by increasing faculty teaching loads. I explained the Cooley tri-semester system, recommended changes in the September term schedule, and urged the enrollment of new classes in January and May.
I recommended some specific changes in teaching assignments, and showed that they would not violate ABA maximum teaching loads. The meeting ended on a somewhat aggressive note sounded by the lady with the sick cat, who insisted that the faculty vote before implementing my suggestions.
I told them that I had a luncheon engagement, and that I would leave them to take whatever action they believed appropriate.
The lunch date was with the enigmatic Bill Hurley, Potomac’s founder, first dean and president. He never showed up. Back at the school, I discovered that the faculty had voted to adopt the Cooley schedule, for the upcoming semester at least.
I spent the rest of the afternoon supervising members of the staff who were enrolling students for the September term. I found that the manner of handling
checks and bank deposits was disorganized, and I began to doubt the competence of the registrar.
Apparently, there had been a culture at Potomac which allowed students to matriculate on a pay-as-you-go basis. I insisted that every student who signed up for a class either pay the tuition or sign a promissory note agreeing to pay it on a weekly basis.
I later discovered that many of the notes were not signed. The registrar insisted that it wasn’t her job to get them signed. I told her that it was her job, if she wanted to keep on working at Potomac.
The next meeting of the board of directors was scheduled for the evening of September 11, 1979. Early that day, I was to meet with creditors of the school.
While the auditors had not yet completed their task, I had put together a preliminary list of creditors. It totaled more than $400,000.
When I arrived at Potomac on the eleventh, I found a certified letter in my mail box. It was a summons and complaint from Bill Hurley, who was suing the school for upwards of $48,000 in consulting fees and severance pay. I called the lawyer whose name was on the pleadings, and I told him of the compromising plan I proposed to submit to creditors that afternoon. He insisted that he come over before the meeting.
While his lawyer was in my office, Hurley called to speak to him. I think he had the idea that by threatening me, he could walk out of the office with a large settlement check. I held fast; told him there was no money. I said I was disappointed in his hard line, and the fact that his client had stood me up the week before. I told Hurley’s lawyer that continuation of the lawsuit would invite a countersuit blaming Hurley for the state of things at Potomac. On that note, he left.
The creditors’ meeting was amicable if not very conclusive. I explained that the school was insolvent; that we had three choices, Chapter 7 bankruptcy, Chapter 11 reorganization, or an out of court creditors composition. I said that I preferred the latter as the least expensive for all concerned. I proposed that we acknowledge all outstanding debts and issue bonds in payment which would bear interest at 10% and be redeemed at 10% per year.
I urged them not to start lawsuits against the school. I told them that I had nothing to offer them except my personal word and commitment to do what was right. If they seemed satisfied with that, it may have been because they didn’t have much choice.
Afterwards, with about an hour to go before the board meeting, Jeff Petrash and I dashed over to Pete Lamb’s office, had a drink with him at the Irongate, and gave him the Hurley suit to defend on behalf of the school. With the board meeting only minutes away, the drink was imperative.
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This Page was last updated on:
08/19/2004