March 2, 2004

Contact: Lynn Bretz, University Relations, (785) 864-8866.

Judge rules in favor of KU, bank in Watkins Trust case

LAWRENCE -- Douglas County District Court Judge Jack Murphy has denied plaintiffs' final requests in a suit against the University of Kansas and Bank of America regarding the operation of Watkins and Miller Scholarship halls on the KU campus.

In a decision dated Feb. 26, Judge Murphy ruled that the student plaintiffs "do not have a right to control the day-to-day operations, maintenance, renovations or improvements made to the halls." That responsibility resides with the university, and the trustee has the duty to review KU's use of the trust income for appropriate expenditures, the judge ruled.

The judge also denied the students' request that the court establish a committee of students and university administrators so that students would have direct input into decisions regarding hall maintenance and upkeep. The judge wrote that the court was convinced "students do have other avenues to voice their concerns about maintenance of the halls" through student proctors, the All Scholarship Hall Council and the Student Housing Advisory Board.

The plaintiffs, who filed the case in early 2001, had alleged that the bank and the university had mismanaged the trust, which was established by KU benefactress Elizabeth Watkins in the 1930s. The student plaintiffs in September 2003 abandoned all of their allegations and claims against the bank and university. The court has now dismissed the students' petition at their cost.

"The university has been confident all along that the trust has been managed appropriately for more than half a century and according to Mrs. Watkins' wishes. We are pleased the court agrees," said Lynn Bretz, university spokesperson.

The university annually gives residents of Watkins and Miller halls a detailed accounting of Watkins Trust expenditures for the year. During the past 10 years, the university has spent $1.2 million from trust earnings for major maintenance and upkeep of the halls.

Bretz said the court action concurs with previous reviews over the years by such regulatory agencies as the Kansas Board of Regents, the Kansas Attorney General's office and the U.S. Comptroller of the Currency. All reviews concluded that the trust is managed properly.


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