Trustees of financially troubled Antioch University, in an escalating dispute over the law school's authority to manage its own operations, have revoked the authority of its law school deans here to disburse approximately $500,000 in funds.
University officials notified five District banks last Friday that the law school's co-deans, Edgar Cahn and Jean Camper-Cahn, no longer were authorized to approve withdrawals from accounts in those banks.
The Cahns, who are expected to APPEAR IN D.C. Superior Court before the banks open this morning to contest the university's freeze on the money, contend that more than $80,000 in checks to students and law school supported groups throughout the country will bounce as a result of the action by the trustees.
University officials contend that the Cahns have collected tuition and other money in behalf of Antioch, but have refused to transfer the funds to the university, which the officials say is a violation of university policy.
The Cahns said in an interview that they have not turned over the funds because they have no assurance from the university that the money will be used to maintain the law school's operations, and fear it might be used instead to pay other university expenses.
It's a little astonishing to have deans of a professional school undertake this kind of action. It's not the normal kind of things deans do. We're a little taken aback by this." Antioch President William Birenbaum said in a telephone interview from New York.
"That law school is not now in compliance with either the fiscal or the academic policies of this university," Birenbaum said.
David L. Warren, the university's acting vice president for finance, said yesterday that the law school's fiscal affairs have been under the university's control since the law school was founded seven years ago.
Last June, when the university was confronted with $1 million in loan defaults, it temporarily suspended its policy that all funds and couchers by turned over to the university. At the last minute, an Antioch trustee came up with a $700,000 gift to the university to ward off bankruptcy and in September, the transfer policy was reinstated, Warren said. The law school did not comply, he'sid.
"During the summer we were left pretty much to manage on our own with such resources as we could get any place," Edgar Cahn said.
In May, the university had failed to meet its payroll and also did not pay $150,000 in law school bills for which funds had been transferred, Cahn said. Warren responded that the bill dispute came down to a disagreement over accounting.
The Cahns said when they learned last fall that the university expected a $1 million cash-flow shortage by the end of this year, they could not agree to transfer law school funds over to the university. Warren and Birenbaum both said increased enrollment and contributions and recent decisions by the university trustees have offset the cash-flow problem.
"At theat point we said when we take students here and we take their money for a year of education, we make a promise that there will be a law school here to educate them," Edgar Cahn said in at interview. Without assurances that the law school's bills would be met, Cahn said, "to turn the money over (to the university) would be a breach of the promises made when the money was accepted."
"They said, 'That's not your money, it's our money,"' Cahn recalled. The law school, however, would not surrender the funds and the situation remained at a standoff until last Friday, when the university froze the bank funds, Cahn said.
John W. Karr, a Washington lawyer representing the Cahns, said the funds currently are deposited in the District of Columbia National Bank, Riggs National Bank, the American Indian National Bank in Washington, United National Bank and Union First National Bank of Washington.
The university froze payments on firtually all the law school's operating funds as well as so-called restricted funds, which include government grants made to the law school or to institutions sponsored by the law school, Karr said.
A court hearing on the dispute has been scheduled for 7 a.m. today before Judge Edmond T. Dale. Karr said he will ask the judge to lift the freeze imposed by the university until the arguments over the law school's financial authority can be resolved.
Antioch Law School, located in the Warder-Totten mansion at 2633 16th St. NE, was established by the Cahns, who have remained as its top administrators through a series of controversies with faculty and students over the years.
The school curriculum combines standard law school courses with a wide range of clinical programs designed to bring legal services to low-income clients throughout the city. Currently, 422 students are enrolled as candidates for law degrees.
The school also is training 24 legal technicians and has brought 40 farm workers to Washington for instruction as paralegals. Antioch Law School also supports paralegal training for about 120 American Indians throughout the country, the Cahns said.
The law school also runs the Urban Law Institute, which currently represents 1,000 low-income clients, and the Institute for Law and Justice, which is the law school's research and development branch.