Food services company sues closed Indiana college
RENSSELAER, Ind. (AP) — A private northwestern Indiana college that closed last year is being sued by a food service company which alleges that administrators concealed the school’s dire financial situation.
Sodexo’s federal lawsuit accuses St. Joseph’s College and its leaders of constructive fraud, fraudulent concealment and breach of contract, The Lafayette Journal & Courier reported .
St. Joseph’s couldn’t be reached for comment by the newspaper.
The company gave the school more than $1.3 million in 2016 to renovate the school’s student center, the lawsuit said. In exchange, the school extended its agreement for Sodexo to operate its food service until 2029.
Sodexo wouldn’t have agreed to the deal if officials had been made aware of the severity of the school’s financial situation, the lawsuit said. The lawsuit alleges that college officials “knowingly and deliberately failed to disclose the facts” and “acted with malice, fraud, and gross negligence.”
Sodexo also hasn’t been paid for outstanding invoices and some remaining bookstore inventory, the lawsuit said. The company is seeking $1.3 million and additional punitive damages.
The Roman Catholic liberal arts college closed last year under a $27 million debt and facing the risk of losing accreditation. The college had offered large tuition discounts in an effort to increase enrollment and had to dip into its endowment to pay the bills.
School officials are hoping to partner with Marian University in Indianapolis and resume operations by 2019 or 2020, Fr. Barry Fischer said in April.
Information from: Journal and Courier, http://www.jconline.com