The court credited Fisk President Hazel O’Leary with significantly reducing the school’s $11 million debt she inherited upon becoming the school’s chief executive six years ago. Over the past two years as the economy has weakened, however, Fisk’s financial situation has worsened. Every Fisk faculty member has taken a 5 percent pay cut; administration salaries have been cut by 7 percent to 15 percent; the school has suspended contributions to pension plans and vacation accrual; all the campus buildings are mortgaged; its endowment has declined to $3.7 million from $4.27 million; and the school “regularly runs” a $2 million deficit annually, according to court testimony.
“The court accredits Dr. O’Leary’s assessment that Fisk has not cut just to the bone “but to the marrow”, and that with the economic downturn, cuts cannot sustain Fisk,” the judge wrote. “An infusion of capital is needed." Reliving Fisk of its O’Keeffe gift would save the school about $131,000 a year, the court was told. The court cited those findings in determining it was legally “impracticable” for Fisk to continue honoring its responsibilities for the collection.
