Disappearance of Mount Ida College not yet complete: $2.5 million in left over funds tied up in court

The last bit of Mt. Ida College in Newton that still exists is a $2.5-million fund meant to pay off creditors following its purchase by UMass Amherst in 2018 that the fund's trustee can't close out because Mt. Ida's last president says he's owed a severance payment that UMass doesn't want to pay.

Faced with potential legal action by either side should he do something the other doesn't like, fund trustee Keith Lowey formally sued both sides in Suffolk Superior Court today, asking a judge to apply some Solomonic wisdom and figure it out.

In one of their final acts before selling their Newton campus to UMass in 2018, Mt. Ida trustees created a trust fund to settle claims by creditors of the school. Once the trust had settled with creditors, any remaining money was to be handed over to UMass.

In his filing, Lowey says the fund has settled up with everybody - except for Barry Brown of West Newton, Mt. Ida's final president. Brown, acccording to Lowey, was making $420,000 a year when Mt. Ida dissolved and:

[A]lleges that he is contractually entitled to a severance payment in the amount of two times the base salary of his employment with MIC, pursuant to his employment agreement, because his employment ended as a result of MIC’s closure within the first three years of that agreement. Brown further asserts that his payment entitlement constitutes a claim entitled to full payment prior to distribution of the trust residue to UMASS.

The problem, Lowey continues, is that:

UMASS contends that Defendant Brown waived and agreed to release any claim to a contractual severance payment and, therefore, the entirety of the remaining funds held by the Trustee constitutes the trust residue to which UMASS, under the Trust Agreement, is entitled.

And so, he tells the court, he's caught between a rock and a hard place:

This [lawsuit] is Plaintiff’s only means of protecting himself from potential multiple liabilities for claims made by the Defendants.

Plaintiff is willing and prepared to pay the funds to the party designated by this Court as entitled to the funds, but is unable to make such determination and distribute the funds without exposing himself to liability.

Absent a judicial determination of the rights and interests of the Defendants, Plaintiff faces the threat of multiple lawsuits being filed against him and incurring personal liability.

This is at least the second suit filed over the end of the small college. In 2020, a federal appeals court ruled against former students, saying they were owed nothing for the way the school simply ended.