MICHIGAN
The Wall Street Journal
March 25, 2018
By Melissa Korn and Rebecca Davis O’Brien
The tally includes possible settlements with about 250 victims, legal fees associated with an army of law firms representing the university and fines
Financial fallout from sexual-abuse allegations against former U.S. national gymnastics team doctor Larry Nassar will likely soar well past half a billion dollars for Michigan State University, estimates from legal experts indicate, more than twice the cost of the abuse scandal at Pennsylvania State University.
The tally includes possible settlements with about 250 victims, legal fees associated with an army of law firms representing the university and fines. Victim settlements alone could account for over $300 million, based on precedents in the Penn State and Catholic Church abuse cases. It isn’t clear how much of the tab would be covered by the school’s insurers.
The looming costs have major implications for Michigan State, especially if state lawmakers pass proposed bills that would increase the statute of limitations for victims and take away legal immunity for public universities. Interim President John Engler, a former Michigan governor, has said increased tuition is one possible way to cover the costs, and warned that consequences could be even more dire.
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Mr. Feinberg said another potential approach is establishing a victim compensation fund, with an administrator evaluating claims and offering payouts based on specifics of the abuse. With that approach, Mr. Feinberg has overseen payments to resolve more than 450 claims of abuse against the Catholic Church in New York so far. Such systems were also used after the BP oil spill and the Sept. 11, 2001 terrorist attacks.
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