UI, foundation can present case jointly

Sat., June 18, 2005

Associated Press

BOISE – A judge says the University of Idaho can join the $25 million lawsuit its foundation has filed against their former attorneys in the failed University Place project.

Fourth District Judge Daniel Hurlbutt allowed the Moscow school and its nonprofit foundation Thursday to present their cases together, rather than separately.

The move should streamline and simplify arguments and document sharing in the complex case involving financing for the downtown Boise office complex and satellite campus. Attorneys representing the lawyers and companies involved didn’t oppose the UI’s request to join their case with the foundation.

The UI and the foundation are alleging four Boise lawyers and their firms committed legal malpractice and breached their fiduciary duty when they helped set up financing for the planned $136 million project.

When an economic downturn soured demand for office space, the UI and the foundation used restricted funds through unauthorized loans to pay for predevelopment costs.

Eventually, the project was scaled back to a single $50 million building and the foundation says it lost $26 million.

Besides an ongoing criminal investigation into the financing scheme, the failed project has also prompted another lawsuit by the UI against its insurance company for $10 million, conflict-of-interest complaints by the Idaho State Bar Association against some of the attorneys, a $5.6 million lawsuit by the foundation against the builder of the project, and layoffs at the UI, where officials blame University Place for exacerbating a budget crisis that has left the school as much as $20.7 million in debt.

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