MSU set­tles

School pays Nas­sar vic­tims $500M.

USA TODAY US Edition - - FRONT PAGE - A.J. Perez Con­tribut­ing: David Jesse and Gina Kauf­man, Detroit Free Press

A grim process will be un­der­taken in the com­ing weeks to de­ter­mine how much each of the roughly 300 sur­vivors of Larry Nas­sar’s sex­ual as­saults will re­ceive as part of the $500 mil­lion set­tle­ment with Michi­gan State Uni­ver­sity.

While the news re­lease that an­nounced the set­tle­ment Wed­nes­day didn’t state how the process will work, the case likely will fol­low sim­i­lar abuse cases — like those set­tled by the Catholic church across the coun­try — in­volv­ing dozens of vic­tims. An independent ar­bi­tra­tor, typ­i­cally a re­tired judge, is brought in to as­sign a dol­lar amount that each abuse sur­vivor will get.

John Manly, who rep­re­sents more than half of Nas­sar’s known vic­tims, told USA TO­DAY he couldn’t give de­tails of ex­actly how the al­lo­ca­tion process will work in this case, but he sum­ma­rized how sim­i­lar cases he’s worked were han­dled.

“There are go­ing to be a va­ri­ety of fac­tors that will be taken into ac­count,” said Manly, who rep­re­sented many of the more than 500 abuse vic­tims who set­tled with the Arch­dio­cese of Los An­ge­les in 2007. “The num­ber of times some­body is abused doesn’t nec­es­sar­ily mean he or she will get more. Some peo­ple are abused once and are never the same. I’ve had plain­tiffs who were abused on mul­ti­ple oc­ca­sions who ended up bet­ter off in life than a per­son abused once. You have to look at a lot of other fac­tors.”

James White, another at­tor­ney who rep­re­sents Nas­sar’s vic­tims, also de­clined to talk about the set­tle­ment specif­i­cally, but he said his past cases were han­dled in the same way Manly de­tailed.

“There’s a re­view by a third party where dif­fer­ent vari­ables will be taken into ac­count and (an ar­bi­tra­tor) makes rec­om­men­da­tions,” White told USA TO­DAY.

Those vari­ables are plen­ti­ful and in abuse cases of­ten hard to quan­tify.

“Peo­ple think there’s some ma­trix the ar­bi­tra­tor uses to make a decision,” Ray­mond P. Boucher, who sued and set­tled with three Catholic arch­dio­ce­ses in South­ern Cal­i­for­nia. “You can’t just di­vide it up evenly and give ev­ery­one the same, like what hap­pens in class-ac­tion law­suits against phar­ma­ceu­ti­cal and med­i­cal de­vice com­pa­nies.”

The ar­bi­tra­tor, typ­i­cally cho­sen by lawyers rep­re­sent­ing the vic­tims, has ac­cess to the case files for each vic­tim that de­tail the abuse. If there are ques­tions about a vic­tim’s case, the ar­bi­tra­tor could re­quest more in­for­ma­tion from the lawyer rep­re­sent­ing that vic­tim, Boucher said.

“They’re go­ing to look at the na­ture and ex­tent of the abuse and what psy­cho­log­i­cal, phys­i­cal and emo­tional im- pact it had,” said Boucher, who was not con­nected to any of the law­suits in­volv­ing Michi­gan State. “They’re go­ing to want to know what last­ing le­gacy that abuse had on the vic­tim.”

The process could be com­pleted in as few as three months. Boucher said the money will likely be fully dis­trib­uted by year’s end.

Once the vic­tim agrees to the al­lo­ca­tion process, he or she is bound by what­ever amount the ar­bi­tra­tor sees fit to award. The vic­tims in the Michi­gan State case could opt out now and sue Michi­gan State in­di­vid­u­ally.

A to­tal of $425 mil­lion will be avail­able to the cur­rent pool of vic­tims who sued and another $75 mil­lion is set aside for vic­tims who have yet to come for­ward. Of the $500 mil­lion, about a third will go to le­gal fees.

“There isn’t enough money in the world to com­pen­sate what was done to these vic­tims,” Boucher said. “There’s no money that can bring them back to a place where they were be­fore they were abused. Any dol­lar amount would be in­ad­e­quate, but at the same time that’s the best our sys­tem can do.”

In­terim Michi­gan State pres­i­dent John En­gler has long said the costs will be cov­ered by tu­ition and state aid. Law­mak­ers have said no state aid should be used.

The school brought in $859 mil­lion in tu­ition rev­enue in 2016-17, ac­cord­ing to its au­dited fi­nan­cial state­ments. That’s 29% of its to­tal rev­enue of $2.9 bil­lion. If MSU’s rep­u­ta­tion has suf­fered from the scan­dal, it could see a drop in the num­ber of stu­dents en­rolling, which could lower that in­come.

On the other side of the ledger, the uni­ver­sity has $1.1 bil­lion in out­stand­ing debt. Ash­ley Ram­chan­dani, a credit an­a­lyst with S&P Global Ratings, said it con­sid­ers MSU to be in good shape fi­nan­cially with debt and could likely add some if needed. MSU also ended the last fiscal year with $1.1 bil­lion in un­re­stricted net as­sets. That’s money that isn’t legally con­tracted to a cer­tain project but of­ten is set aside for par­tic­u­lar projects.


Olympic gold medal­ist Aly Rais­man gives her vic­tim im­pact state­ment on Jan. 19 in Lans­ing, Mich.

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