Trusteeship - May/June 2020 - 19

Closing at the Right Time and in the Right Way

of their distinctiveness and the fact they complemented their
other offerings. We did our best to make sure relevant revenue
Sometimes even when an institution is not in financial distress, its
went along with those programs to support them, as well as our
long-term prospects for survival are so unpromising that a dignirelevant library holdings and equipment in the case of art therapy.
fied closure is the best option. Such was the case with Marylhurst
This was also a benefit of deciding to close while we still had cash
University, a small, Roman Catholic liberal arts institution near
reserves and no debt: a university in the midst of closure cannot
Portland, Oregon, that had already lost nearly one-third of its
gift resources to other institutions if they have outstanding obligaenrollment by the time Melody Rose became its final president in
tions to creditors.
2014 and that closed in 2018 after a 125-year run.
"And with respect to our staff, we extended a severance package
"I arrived as someone who had done work with distressed
to all regular employees and provided very robust outplacement
institutions with some success and who was being asked to diagservice. Again, part of the reason our board made the decision to
nose the situation and provide recommendations for the future of
close was that we did not want to find ourselves in a place where
the institution," says Rose, who is also a senior consultant at AGB
our cash was eroded and we couldn't take care of our loyal staff."
Consulting who is writing a book on strategic decision making for
Rose also finalized a deal with nearby Saint Martin's University
higher education institutions that may wish to consider mergers
as the custodial institution for Marylhurst's student records and to
and closures. "After examination, what I found was an institution
provide communication with its more than 12,000 living alumni.
with a history of innovation around online learning and serving
In return, Marylhurst received
nontraditional students that had
approval to transfer $3.14 milnot had a big, new bold initiative
lion of its endowment to Saint
in some time. Marylhurst was
Martin's, which is expected to
losing market share, had low
Sometimes
even
when
an
institution
generate more than $100,000
brand recognition, sat nine miles
is not in financial distress, its long-term prospects a year in scholarships for Saint
away from Portland in an area
Martin's students.
with very poor transportation
for survival are so unpromising that a
"It is vital in closing an instiinfrastructure, lacked adequate
dignified closure is the best option.
tution to ensure that the mishousing, had some but little
sion continues through the life
cash, and a reversionary clause
of the alumni and that student experiences and degree attainment
that gave it little flexibility in the use of its church-owned land.
can be verified in perpetuity," Rose says.
I and the board concluded that we had no real good long-term
But Rose's and the board's work is still not done. "Even as an
options and that the right decision was to end the institution in a
institution closes, the board may stay on," Rose says. "We are
way that minimized harm to all stakeholders."
approaching the two-year mark of the vote to close and we still
"It's a point of pride that we transferred or graduated 92 perhave residual resources and a small board of the final four board
cent of the body enrolled after the board made its [May 2018]
members with whom I consult to oversee the wind-down of the
vote to close," Rose says. "Within two days of the vote, we had
corporation. You cannot close a corporate entity if any debts or
provided individualized plans of completion and official tranassets remain to the corporation. We oversaw the final audit in Janscripts for all enrolled students and within one week of the
uary 2020, which was clean, as have been all past audits. We also
announcement, we had hosted on-site a transfer fair with 30
settled a small lawsuit, and the board needs to be in place in order
institutions present. We also taught one additional term and
to pay out residual unemployment claims. They will stay on until
reworked class schedules in that final term to finish off the
we ultimately disburse all remaining assets."
degrees of as many students as possible.
"It [serving as a trustee of a closing university] is challenging
"We also transferred whole programs to other institutions,
work that has none of the joy that typically comes from being a
which we did because we had distinctive programs that students
university trustee," Rose says. "Our trustees don't interact with
would have had a hard time finding replacements for," Rose says.
students anymore or get to enjoy the university's offerings. Yet they
"We moved our master's degree in food systems and society
have all the challenging work that comes with being a trustee. They
program to Oregon Health & Science University and a master's
are doing the work to complete and honor the mission of the order
of art therapy to Lewis and Clark College. We transferred both
of the Sisters of the Holy Names of Jesus and Mary that founded
the students, about 25 for art therapy and 20 for food systems,
the institution in 1893. It is the work of the angels."
and faculty, which required us to negotiate the transfers with the
regional accreditor (NWCCU). We were fortunate that these proDavid Tobenkin is a freelance writer based in the greater Washington, D.C. area.
grams were highly desirable to the acquiring institutions because

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Trusteeship - May/June 2020

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