Healey vows to investigate Mount Ida deal
AG still gives reluctant OK
Attorney General Maura Healey is investigating whether Mount Ida College officials shirked their duty to the Newton school in quietly leading the college into an $86.5 million takeover deal with the University of Massachusetts Amherst that left students, faculty and staff scrambling.
In a letter to Mount Ida yesterday, Healey’s office gave her stamp of approval on the deal despite what it called a “disorderly and harmful closure” on the sole basis that the transaction with UMass Amherst represented “fair value” for the struggling college and complied with charities laws.
The letter came as lawmakers prepared to grill Mount Ida officials over the controversial closure and determine what oversight powers the state should wield in monitoring financially troubled colleges.
Chairwoman of the Senate Committee on Post Audit and Oversight Sen. Kathleen O’Connor Ives said today’s hearing will “ask the important question of whether or not everything is being done that can be done to make the students and parents and faculty whole, so that they are held harmless by this transaction.”
O’Connor Ives told the Herald the committee will also discuss whether the UMass Amherst acquisition of the Newton campus will be to the exclusive benefit of its students in Amherst and leave out the university system’s other students across the state.
In her letter, Healey slammed the college for the rushed and haphazard rollout of its plans and failure to provide students with adequate paths forward.
“We are deeply disappointed by MIC’s decision to close its doors without a school closing plan and without appropriate notice to students, faculty, staff, and regulators,” Healey’s office wrote. “Your treatment of your own students is particularly upsetting and extremely unfair to them.”
The “abrupt closure has caused real harm to students and families, many of whom are still unsure of what to do,” the AG’s office said.
Healey’s office said it is probing whether Mount Ida’s board of directors and senior administration breached their fiduciary duty to the college, a charge that could lead to civil penalties.
“We will continue to review whether Mount Ida’s Board of Trustees and senior administrators violated their fiduciary duties in addressing the college’s financial condition and carrying out its educational mission,” Healey said in a statement.
Mount Ida says the deal needs to close by today in order for the college to make payroll. Absent closing, the school said it would file for bankruptcy.
The small struggling college caught its employees and students by surprise when it announced April 6 it would hand its 74-acre Newton campus over to UMass Amherst in exchange for the university assuming its mounting debt.
In April, university officials estimated the college had $55 million to $70 million in debt, but the actual amount ended up being much higher.
Healey’s office valued the deal at $86.5 million, with UMass Amherst paying off $75 million of Mount Ida’s debt and an undisclosed philanthropic debt-holder agreeing to forgive $11.5 million of the $23 million owed as part of the deal.
Healey’s office declined to name the debt-holder. A spokeswoman for Mount Ida said the lender was confidential but the forgiveness is “predicated on the continued educational use” of the campus.