Lawsuit FAQ from July 2021

What’s happening?

On June 7, representatives of the Alumnae Association of Mills College who serve on the Mills College Board of Trustees (including* AAMC President Viji Nakka-Cammauf, MA ’82, and Tara Singh ’05, MBA ’07, who served as an alumna trustee on the Mills board until July 1) filed a complaint in Alameda County Superior Court against Mills President Elizabeth Hillman, Board Chair Katie Sanborn ’83, five additional trustees (Eric Roberts, Marilyn Schuster ’65, Elizabeth Parker ’85, Ophelia Basgal, and Karen May ’86) as well as two college officers (Maria Cammarata and Renee Jadushlever).

Why is this happening?

In March, President Hillman announced that, due to financial and enrollment pressures, Mills would shift away from being a degree-granting college and become a Mills Institute. The announcement followed a vote of the Mills College Board of Trustees to begin developing a “teach out plan” which, if later approved by the trustees, would lead to the closure of the College.

Our alumnae trustees believe that several trustees (not just alumnae trustees) did not receive all the information and documentation necessary to make an informed decision as to the financial health of the College and the future of the College.

They have asked individually and through their attorneys for documents that would allow them to assess fully the financial conditions of the College, as required by their fiduciary duties as trustees. The College has continually and systematically not granted them access to documents to which the Board of Trustees’ own bylaws state that they are entitled. The alumnae trustees believe they cannot perform their duties effectively without all the information they are seeking. They wish to not only have access to the documents but for there to be full discussion in a Board of Trustee meeting about the contents of the financial documents and an opportunity to ask questions that would further add to the trustees’ understanding. There are a number of other issues that are addressed in the complaint, but the withholding of information and important financial documentation is the key matter to be addressed first by the Court.

What is a complaint?

A complaint is a document that sets forth the basic facts as well as a legal basis for a claim and relief. The complaint begins the process for a lawsuit.

In a broader sense, it is important to remember the Court and the entire litigation process are designed to seek the truth.

In this case, the alumnae trustees, supported by the AAMC Board of Governors, believe that important information required for them to make an informed decision regarding the future of Mills College is being denied to them. After requesting and being denied the information, the next course of action was to take the issue to court in an effort to seek the truth: to determine the financial health of the College and establish a basis for making decisions about the College’s future.

Read the Complaint

Is everything that happened in the complaint?

No. The complaint has the broadest information about the case. It starts the process of seeking the truth by asking the Court to direct the College to share the documents with the alumnae trustees that they are withholding.

If the complaint was filed on June 7, why are we just hearing about it now?

Due to COVID-related court closures and employee furloughs, the court did not begin processing the complaint until June 17th. A judge was not assigned until June 28th. This is not unique to our complaint; it is an across-the-board issue for all new lawsuits being filed. On the advice of counsel, the filing of the complaint was kept confidential until it appeared in the court’s online registry of filed lawsuits.

Will the College continue to work with us if we are suing them?

This is simply a lawsuit seeking to determine the truth so that the decisions about Mills’ future can be undertaken thoughtfully and with knowledge of all the available information. The alumnae trustees and the Board of Governors love and are dedicated to serving Mills. They take their fiduciary duties very seriously and are taking legal action to gain access to information they feel is essential to performing the due diligence required of them as trustees of the College.

Did the alumnae trustees not do their job?

No. Quite the contrary. The alumnae trustees have been put in the most untenable situation. They have been asked to decide on the very existence of Mills College and its 169-year-old mission without the proper tools, process, or information.

Does it matter that the alumnae trustees do not have all the information?

Yes. The very existence of the College is at the center of this complaint.

Important documents have not been shared and no full listing of the College’s assets has ever been provided to several, if not all, trustees. How can the trustees perform their due diligence in understanding the overall financial health of the College without knowing what its assets and debts are?

Each trustee is bound to perform their fiduciary duty to the College, and the alumnae trustees are further bound to their due diligence in representing the wishes of the alumnae-at-large.

One question we’re seeking to answer concerns the severity of the College’s financial distress. While Mills may be facing cash-flow challenges, significant debt, and deferred maintenance, it holds substantial assets. To understand how liabilities and assets impact the College’s future, alumnae trustees need to receive the supporting documents they have requested. Once we have these documents, we will engage an independent forensic accountant to validate the accuracy of what the trustees have been told by the College.

How much is this all going to cost?

A lot. We wish the College had simply given the information requested and engaged in a fair process that allowed the alumnae trustees to exercise their fiduciary obligations to the College and alumnae. It makes us wonder, Why hasn’t the College shared what is being requested?

Actions to Date:

In April, AAMC governors voted to retain Greenberg Traurig, a prominent law firm with expertise in board governance issues, to investigate the rights of the alumnae trustees and whether they had been violated. Greenberg Traurig determined the alumnae trustees did have a claim.

In early May, when it appeared Mills College was heading toward closure, the governors approved a payment of $100,000 for the amount over the retainer that was due and to continue with the work in progress, and an additional $200,000 to be paid (in tranches of $100,000) if we moved toward litigation or other legal action. It was discussed that the lawsuit itself could easily cost millions of dollars and that one should only begin litigation if they were committed to seeing it through. The motion passed. There was an additional motion asking for a survey to see whether our constituents supported legal action.

In June, the governors voted to approve Greenberg Traurig’s hiring a forensic accountant for a sum not to exceed $50,000 and a consultant in higher education for $15,000 ($5,000 per month for three months).

Total money spent thus far:

April 2021: $61,113.50

May 2021: $104,792.00

June’s bill has not been received. It will be substantial, as the bulk of work was done in June.

How will we pay for it all?

Thus far the monies have come from the AAMC general fund.

There is a major fundraising campaign, For Generations Still, that is about to launch to raise the necessary funds. Even before the campaign’s public launch, a few historically generous alums in the Los Angeles Mills College Alumnae branch have pledged to give more than the total of our costs to date. Fundraising events are being planned. Stay tuned for some exciting announcements.

Do all alumnae want this? Was a survey done? What were the results?

The AAMC conducted a survey in mid June that showed 87% of respondents (out of 1,208 total) wanted the AAMC to halt the process of dismantling Mills as a degree-granting college. Furthermore, 56% wanted the AAMC to spend as much as needed from the association’s assets for this effort, and another 27% favored spending up to half of the AAMC’s assets.

However, on June 17, while that survey was being conducted, the College announced that it was entering formal discussions to combine with Northeastern University. Because the possibilities being considered for Mills are different now than when the June survey launched, the AAMC fielded another survey on July 7 to get current information on alumnae opinions.

Will this end the negotiations with Northeastern University (NU)?

It shouldn’t. There is no reason to believe NU should have a problem waiting 60 days (or more if needed). They are a top-notch school with professional officers and their own attorneys who understand basic litigation requests. Legal complaints are not unusual when there are negotiations between partners with many constituents. Additionally, NU needs land, and no other Bay Area campuses are on the market. Furthermore, the College announced in March that it was initiating a transition but would continue granting degrees through 2023. A couple months pause over the summer should not make a big difference in the negotiations. Again, the purpose of our legal action is to seek the truth. It is not about Northeastern University or any other potential partner.

How does this suit affect the Mills Institute?

The lawsuit is about seeking the truth about the College’s finances and future prospects. If the College is healthier than we were told, it may be possible to still have an Institute in addition to a College. If the finances are as reported, the litigation will not affect the creation of the Institute.

* Alumnae trustees Adrienne McMichael Foster ’74 and Deborah M. Wood ’75, who are listed as plaintiffs in the complaint, withdrew from the lawsuit after it was filed.