Month: December 2022

“Speak Because You Can”…Act Because You Should

News that the Taliban have “..banned women from universities in Afghanistan” has been condemned by the UN Security Council and many other countries.  US Secretary of State, Antony J. Blinken said, “The Taliban cannot expect to be a legitimate member of the international community until they respect the rights of all in Afghanistan.”  We wait to see whether the board of Times Higher Education (THE) makes a statement1 or chooses to impose any prohibition on Afghan universities in its rankings.

It’s A Man’s Man’s Man’s World2

Bologna Topco Ltd, the parent company of THE World Universities Insights Ltd, Data HE Ltd, The Knowledge Partnership and BMI Global Ed Ltd does not have a single female director.  This lack of diversity was noted as far back as May 2021 following a presentation by owners Inflexion Private Equity but nearly two years later it’s the same names and faces in charge.  Any action could come down to whether two men who have quietly become among the most powerful and influential in higher education think there is a duty to stand up for the rights of women.

THE World Universities Insights Ltd is the parent company’s main trading entity and has two directors – Paul Howarth and Paul Ransley (who also sit as directors on Bologna Topco).  Since 2020 it has been the vehicle for purchasing data analytics company dataHE, student recruitment event operator BMI Global Ed, HE consultancy The Knowledge Partnership – with each company purchased having the same two directors.  Adding the purchase of InsideHE in early 2022 has, arguably, given Howarth and Ransley unprecedented power to form opinion and control data in global higher education3.

Some will claim there is editorial independence but Howarth’s statement about a response to the “invasion of Ukraine by Russia” shows the symbiotic link between the rankings, the news outlet and the other businesses.  InsideHE has run two THE led opinion pieces (28 April and 12 October) on rankings since being acquired earlier this year which might suggest the penumbra of Rupert Murdoch style influence.  It’s an intricate web so it is appropriate to suggest that, “with great power comes great responsibility” and the THE should both speak up and act.         

What’s Up?4

The THE methodology clearly “reserves the right to exclude universities that ….are no longer in good standing.”  Regrettably, decision makers at THE obviously do not think that Russian institutions explicitly supporting a brutal, rapacious, illegal attack on a neighbouring country is grounds for losing “good standing”.  One might hope that the complete exclusion of women from higher education presents good grounds for immediate action.

While no Afghan universities have made it to the World University Rankings 2023 the Impact Rankings provide fertile ground for manipulation as institutions can choose which of the United Nations Sustainable Development Goals to focus on.  Bakhtar University and Kabul Polytechnic University rank with around 650 other universities on a ranking of 1001+ in the most recent Impact Rankings with other Afghan universities featuring in 2020 and 2021.  One of the four scoring categories for Bakhtar University is the individual SDG measure 5 – Gender Equality, which the THE notes, “SDG itself phrases…explicitly as supporting women”.

The need for an intentional and purposeful ban is urgent because the data used in compiling the rankings are substantially self-selected by the institution and up to two years out of date.  For example, the April 2022 Impact Rankings were, at best, using data from December 2020 but it may have come from January 2019.  Universities also choose which three SDGs to provide information for (with only SDG 17 obligatory) which is probably why no Russian universities chose SDG 16 – Peace, Justice and Strong Institutions for their 2022 entries.

Laugh It Off5

We may be best not to hold our breath on the THE standing up for women’s rights.  One part of the reasoning from Paul Howarth, chief executive, not to exclude Russian universities from THE rankings was that, “we would expect Russian universities’ performance to be impacted negatively by the actions of the Russian government.”  Those who understand the ranking considered that statement to be dubious, detached and likely ill-founded at the time and they have been proved correct.

More Russian universities were featured in the latest THE World Rankings 2023 (103) than the equivalent for 2022 (100) with more in the top 800 (14) than the year before (12).  While the top university, Lomonosov State University dropped by five places the chart below shows that year on year it did much better than several non-Russian institutions with similar ranking in 2022.  The overall volatility shows the complete nonsense of the university rankings but also the vacuousness of the chief executive’s stated expectation.

University THE World Ranking 2022THE World Ranking 2023Year on Year Rise(+)/Decline(-)
Wuhan157173-16
Aberdeen158192-34
Colorado Boulder158148+10
Lomonosov158163-5
Catholique de Louvain162170-8
Durham162198-36
Ottawa162137+25
SUSTech162166-4

The publicity value for Russia is even greater in the THE Impact Rankings where the number of Russian universities listed increased by 25.3% from 75 in 2021 to 94 in 2022.  In the latest THE Reputation Rankings the number of Russian university also increased, year on year, from five to six with the top ranked institution rising from 38 to 35.  By any objective measure the THE Rankings appears to continue to reward Russian universities and the Russian government that supports them as a tool for credibility and prestige.

Which Side Are You On?6

University ranking businesses like THE and QS World University Rankings and service providers like Study Portals seem willing to continue promoting universities that accept or even actively support repressive regimes.  While other commercial businesses have taken direct financial hits from withdrawing their involvement in Russia the rankers and recruiters continue to promote them even at the possible expense of students being drawn into the armed conflict.  The rankers may prefer to prevaricate or to ignore Russia’s actions but drawing a line in the sand over something as fundamental as women being allowed to study in higher education should be a simple decision. 

Notes

The home page of the viewfromabridge blog includes a quote from a DACA recipient.  The full quote is, “Speak because it’s your life, speak because you can”, which should remind everyone who has the freedom to comment that they should speak up for those who are repressed, endangered or unable to represent themselves.  If you have the power you should also take action on their behalf.

The sub-headings are all titles from songs written wholly or mainly by women.  

  1. As far as I can find in a search the Times Higher Education has published one news item by Pola Lem on this issue (21 December).  No Opinion Piece has been published or statement made by the organization.
  2. Betty Jean Newsome was co-writer of this song, made famous by co-writer James Brown, and is credited with the lyrics by most sources.  For all the macho posturing it’s worth listening to the end of the song “He’s lost in the wilderness, He’s lost in bitterness, he’s lost lost”
  3. In addition to the direct control listed Times Higher Education has partnerships with companies including Study Portals (student aggregator), SI-UK (student recruiter), Liberika (student aggregator) and Casita (student accommodation provider).  A previous blog has noted the role of Study Portals in encouraging students visiting THE Student to apply to universities in Russia.
  4. Performed by 4 Non Blondes and written by lead singer, Linda Perry.  On the backstorysong.com  podcast she comments on the song, “It’s like, ‘Why does it always seem like either I’m struggling, or there’s some f–king political mess happening? Why is this all happening in the world?’’  Under some circumstances who wouldn’t “pray every single day, for revolution”?
  5. Laugh It Off is by Russian feminist protest and performance art group Pussy Riot.  It is reported   that Pussy Riot are currently touring Europe and demonstrating solidarity with Ukraine.  Readers will make up their own mind about the group’s philosophy, tactics and messages but it is difficult to disregard their commitment and their bravery in challenging a “political system that uses its power against basic human rights.”
  6. “Which Side Are You On?” is always a good question.  The song was written in the 1930s by Florence Reece in response to intimidation by the Harlan County Coal Operators’ Association and the sheriff’s department, led by Sheriff J.H. Blair, who acted as its enforcers. Sometimes you have to make a choice.

Image by Dimitris Vetsikas from Pixabay

The image is of a statue in Parliament Square, London, which honours the British suffragist leader and social campaigner, Dame Millicent Fawcett. The statue, erected in 2018, was Parliament Square’s first monument to a woman and also its first sculpture by a woman.

Officium….Conflictus

A 2020 Harvard Law School Forum on Corporate Governance claimed that “…the overall state of JV governance is still not good.”   The same Forum offered a piece in 2019 which explicitly discussed the “JV Directors Duty of Loyalty” and begins “Many joint venture board directors find themselves in a perceived state of conflicted interest.”  It’s relevant reading when the court case1 between INTO2 and University of South Florida financing Company (USFFC) shows the Secondary Case3 naming four employees of the University of South Florida (USF) as defendants. 

These individuals were appointed by USSFC as directors on the Joint Venture between USF and INTO University Partners (IUP), with one of them serving for just a single day on the joint-venture Board.  The defendants, Jennifer Condon, Karen Holbrook, Nick Trivunovich, and Ralph Wilcox are collectively referred to in the submissions as the “Former USFFC-Designated Joint Venture Directors.”4. INTO’s claim is that, “As a result of the USF Parties’ threats and failure to perform their contractual obligations, as well as the Former USFFC-Designated Joint Venture Directors’ breaches of their fiduciary duties to the Joint Venture and INTO USF LPLP, Plaintiffs have suffered and continue to suffer financial harm in the tens of millions of dollars.”5.

INTO Claims Against the Individuals as Count V

The INTO claim for “Breach of Fiduciary Duty Against the Former USFFC-Designated Joint Venture Directors.” is Count V of their complaint6.  The assertion is that they, “..breached these duties by continuing to serve on the Joint Venture’s board of directors with knowledge that USFFC and USF intended to and did purport to terminate the USA despite the Former USFFC-Designated Joint Venture Directors’ serious conflicts of interest.”

In the same Count, two of the four are further accused that they “..breached their fiduciary duties by actively advocating for the baseless termination of the USA [University Services Agreement]..” and that “Their advocacy for termination of the USA was motivated by their concern for the advancement of USF, not the Joint Venture or INTO USF LP, and their loyalty to USFFC and USF, whose interests they put before those of the Joint Venture and INTO USF LP.”

There is the further suggestion that, “The Former USFFC-Designated Joint Venture Directors breached their fiduciary duties by resigning as directors and leaving the interests of the Joint Venture and INTO USF LP without proper care.”

This was not the first time the question of conflict of interest had come up but it was an interesting reversal from an earlier accusation by Fell. L. Stubbs, Treasurer of USF and Executive Director of USSFC.  On 13 May 2 he sent a memo alleging that “While INTO has continuously accused the USF FC appointed directors of conflicts that they have taken care to appropriately manage, INTO has not done the same. For instance, Anmar Kawash, an INTO appointed director to INTO USF, continues to represent the stockholder and IUP in the parties’ dispute.”7

Defendant’s Response and Motion to Dismiss Count V

The defendant’s response on 3 November8 was a Motion to Dismiss Count V claiming, “The ultimate issue…is whether the University of South Florida (“USF”) correctly terminated its University Services Agreement (“USA”) with the Company [INTO USF Inc,.  It continued,“But that simple breach of contract case has exploded into an eight-count diatribe against any person or company that provided information to USF or agreed with the termination decision….”  In addition to claiming that the individuals acted in ways that were “contractually agreed” and which they were “entitled to” do the response asserts that “…this lawsuit is the INTO Entities’ way of exacting revenge and forcing anyone who reported to USF about the Company’s financial distress to pay the penalty.”

In seeking the Motion to Dismiss there are claims the action is barred by sovereign immunity, absolute immunity and corporate “primacy of contract” doctrine, as well as failing to show a cause of action.  There is a specific argument that the individual who was a director for one day “did not take part in any of the conduct about which the INTO Entities complain” because the appointment was made after “the SHA was terminated.” 

Request for Production and a Further INTO Response on Count V

On 9 November INTO issued “Requests for Production”9 to each of the four individuals covering the period from January 1, 2019.  The main elements requested are “all documents relating to the lawsuit”, “All documents and communications relating to the February 2022 board meeting”, “All documents and communications relating to Your resignation as a director of the Joint Venture”, and “All Your notes or minutes from any meetings, whether in person or remote, involving You relating to the Joint Venture and/or Plaintiffs”.

On 23 November INTO filed its response10 to the defendants’ Motion to Dismiss of 3 November, claiming “It is difficult to imagine a clearer example of divided loyalties and breach of fiduciary duty than the one laid out in the Amended Complaint.”  The Response lays out its reasons for this claim and makes legal points against the assertions of immunity and other arguments for dismissal.  The argument related to the individual who was a director for one day states that she “..breached her fiduciary duties to the Joint Venture by resigning from her position as Joint Venture director, leaving the Joint Venture without proper care..”

The Defendant’s Reply to INTO’s Response on Count V

To a casual reader, the Reply for the defendants’ on 2 December11 adopts a tone that mixes legal argument with language that a detached observer might consider scornful.  On sovereign immunity they say, in a “gotcha” moment, “Given this law, the INTO Entities pled directly into the sovereign immunity defense.” and conclude, “This end-run on USF’s sovereign immunity is futile.” 

On Primacy Doctrine they suggest, “The INTO Entities confuse substantive and procedural law, as well mutually exclusive remedies.”  On the failure to “state a cause of action” against Jennifer Condon they state, “The INTO Entities’ ineffectual response shows nothing more than their scorched earth policy.”  This looks like a level of rhetoric which one assumes a judge will calmly sift through and ignore while considering the facts of the case.

Breaking Up Is Hard To Do

When Neil Sedaka released the song in 1962 he sang “Think of all that we’ve been through and breaking up is hard to do.”  The current court saga certainly seems a long way from 2010 when IUP and USF began their partnership.  Or even May 2013, when IUP founder Andrew Colin received a Global Leadership Award from the University of South Florida in recognition of his contribution to international education. 

The intervening years may have led to a point where speculation about the “end of the long-term joint venture” model has become a reality.  It may even give other joint venture directors pause for thought about the governance model they work under, the obligations they might have and the legal cover that is offered for disputes.  In this case a moment of truth may come on 25 January 2023 when a hearing is scheduled to hear the motion to dismiss Count V on the grounds of sovereign and absolute immunity12.

NOTES 

This blog reflects on complex legal issues and makes no assertions in support of or against any of the parties involved. References are provided for readers wishing to read more detail. Any authoritative corrections on matters of fact are welcome.

All filing references relate to documentation filed with The Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida Circuit Civil Division.  Further information about the case including the lawyers representing the parties are included in a previous blog.

  1. In the Consolidated Lead Case CASE NO.: 22-CA-006001, Div. L, USF Financing Corporation (USFFC), a Florida not-for-profit corporation, is the Plaintiff while INTO USF LP, a Delaware limited partnership, and INTO USF, INC., a Florida corporation are the defendants (Filing # 156524107 E-Filed 08/31/2022).
  2. As INTO USF LP and INTO USF, INC., are the listed parties in the cases the term INTO is used to describe them in this blog.
  3. In the Secondary Case INTO USF LP, a Delaware limited liability partnership, and INTO USF, INC., a Florida corporation, are the Plaintiffs, while USF FINANCING CORPORATION, a Florida not-for-profit corporation, and THE BOARD OF TRUSTEES OF THE UNIVERSITY OF SOUTH FLORIDA, Defendants.  The amended complaint (Filing # 157809124 E-Filed 09/20/2022) added the four individuals.
  4. Filing # 157809124 E-Filed 09/20/2022  
  5. Filing # 157809124 E-Filed 09/20/2022
  6. Filing # 157809124 E-Filed 09/20/2022
  7. Filing # 153460265 E-Filed 07/15/2022 Exhibit G
  8. Motion and Incorporated Memorandum of Law to Dismiss Count V of the Amended Complaint Against the Former USF FC-Appointed Directors Filing # 160604060 E-Filed 11/03/2022
  9. Filing # 160982138 E-Filed 11/09/2022
  10. Filing # 161827652 E-Filed 11/23/2022
  11. Filing # 162259450 E-Filed 12/02/2022
  12. Filing # 162395119 E-Filed 12/05/2022

Image by Mohamed Hassan from Pixabay 

INTO THE JAWS OF UNCERTAINTY

Friday December 16 at 1pm doesn’t have the resonance of High Noon but a court filing1 suggests it may be the moment for a Special Set Evidentiary Hearing to determine whether a Receiver will be appointed for INTO USF Inc2 (INTO)3. It is termed, somewhat ominously, a JAWS4 hearing in the Docket Entries for the case but it’s not clear who is “gonna need a bigger boat”.  Churchill may have said that “meeting jaw to jaw is better than war” but in business terms this encounter may defy that maxim.

As always, this blog attempts to inform readers but notes that no opinion is offered on the merits of the case or the assertions by either side. For keen readers of detail, the paperwork in the case is filed with The Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida Circuit Civil Division and is publicly available. The Consolidated Lead Case is CASE NO.: 22-CA-006001, Div. L, with a secondary case as CASE NO.: 22-CA-006726, Div. L.

These are complex matters and I will be happy to receive authoritative factual corrections and make any necessary amendments.

WHAT’S IT ALL ABOUT?

The Hearing follows a Motion and Incorporated Memorandum of Law from USF Financing Corporation (USFFC), on 3 October 2022, for appointment of a receiver5. The fundamental request is that this is “…to (1) take control of the assets of the Company and (2) release what should be state auxiliary funds only for the purpose of funding the teach-out, together with such other and further relief as this Court deems just and proper.” 

INTO’s response on 24 October6 urged the court to reject the request with the Argument under two main headings – that “the Joint Venture Is Not Engaging in Self-Dealing Or Waste” and that “the USF Parties’ Arguments Are Baseless.”  It also notes “Appointing a receiver is a rare and extraordinary remedy.” Plaza v. Plaza, 78 So. 3d 5, 6(Fla. Dist. Ct. App. 2011).”

USF made a reply to this on 31 October7 noting that “The USF parties seek to protect for the teach-out $7.5 million of payments made by international students and sponsoring foreign governments for academic instruction and student housing provided by USF.”  They assert that, “At no point in their Response do the INTO Entities indicate they will forward those funds to USF to be used for their intended purpose.”

THIS IS ROUND TWO

Last time the parties were in court in relation to the case was on 19 August 2022 when an Evidentiary Hearing considered an Emergency Motion from INTO for a Temporary Injunction to Maintain the Status Quo.  There was “…live testimony by both parties” and the Clerk’s notes8 indicate that John Sykes, Co-founder and Deputy CEO of INTO University Partnerships, Kiki Caruson, Vice President of USF World and Fell L. Stubbs, Treasurer of University of South Florida and Executive Director of the USF Financing Corporation were in court as witnesses.

An order denying the Motion was made on 31 August9 with none of the four key requirements for preliminary injunctive release having been met.  However, it was noted that “..this ruling is not dispositive or determinative of the merits of the main issues in the case.”

THE BIGGER PICTURE

There are over 100 pages of documentation, including original contracts, in the three documents related to appointing a receiver.  The dispute is part of a wider case centering on USFFC seeking a Declaratory Judgement on 21 April 2022 stating it “…provided its notice of termination of the University Services Agreement and the Direct Admit Marketing Services Agreement….. Once USF terminated the University Services Agreement with the Company, this termination automatically terminated the Stockholders Agreement, which now requires the parties to dissolve and wind-up the Company.”10

INTO’s response of 20 September noted that between February and April 2022 they understood that USF were “..exploring the possibility of revising by mutual consent the original terms of the partnership” but that USF then “…improperly sought to terminate their contracts with Plaintiffs and dissolve INTO USF, Inc.”  They also state that they “..have at all times vigorously disputed USFFC and USF’s assertion that the Joint Venture was insolvent. Not only is this conduct in bad faith and in clear breach of the parties’ contracts, but it represents a transparent attempt to wrongfully appropriate the business of a company that was supposed to be its partner and that it knows has substantial value.”11

Apparently, “The parties have engaged in both forms of alternative dispute resolution mechanisms, but were unsuccessful in reaching a resolution of their dispute.”12

On the legal side USSFC are represented by Buchanan Ingersoll and Rooney PC while INTO have Sivyer Barlow Watson & Haughey, P.A., Bush Ross, P.A., and Susman Godfrey L.L.P.  The latter’s website makes the claim that they are “..America’s premier litigation boutique” so the stakes seem high. 

Notes

All filing references relate to documentation filed with The Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida Circuit Civil Division. 

  1. Filing #159856710, E-Filed 10/24/2022. Jaws Confirmation No. 12J – 349103917354.
  2. INTO USF Inc.,is described in its Marketing and Recruitment Services Agreement with INTO University Partnerships Limited as “offering a range of academic preparatory programs and English language courses to international students which, when successfully completed, enable qualified international students the ability to progress to undergraduate and graduate degree programs at the University (collectively, the “INTO USF Programs”) Filing # 153460265 E-Filed 07/15/2022 Exhibit B
  3. For simplicity the term INTO is used for submissions by defendants, INTO USF LP, a Delaware limited partnership, and INTO USF, INC., a Florida corporation, in the Consolidated Lead Case CASE NO.: 22-CA-006001, Div. L where USF Financing Corporation (USFFC), a Florida not-for-profit corporation, is the Plaintiff (Filing # 156524107 E-Filed 08/31/2022).
  4. JAWS is the acronym for the Judicial Automated Workflow System for the Thirteenth Judicial Circuit System of Florida.
  5. Filing # 158504942, E-Filed 10/03/2022
  6. Filing # 159869006 E-Filed 10/24/2022
  7. Filing # 160306990 E-Filed 10/31/2022
  8. CDOCboa89b3b594b23_1661607751
  9. CDOCbo8ffb49b6e49c_1662035965
  10. Filing # 153460265 E-Filed 07/15/2022
  11. Filing # 157809124 E-Filed 09/20/2022
  12. Filing # 153460265 E-Filed 07/15/2022

    Image by Dmitry Abramov from Pixabay