The Charleston School of Law was on solid financial footing before the five founders started talking last summer about a sale to the for-profit InfiLaw System, says Ed Westbrook, who put up the money to launch the decade-old school.
If you go
What: S.C. Commission on Higher Education meeting
When: 10:30 a.m. Thursday
Where: Commission office, 1122 Lady St., Columbia
It was making so much money that even after the owners pulled out $25 million in profits between 2010 and 2013, the school was still in the black, Westbrook said in a prepared statement.
Now the school is in a tailspin, he said, and InfiLaw representatives at a public hearing last month used the financial mess they had a hand in creating to justify pushing the state Commission on Higher Education to grant the company a license to operate the Charleston school.
The commission will vote Thursday on whether to grant InfiLaw the license, a decision that has been in the works for nearly a year. And both opponents and supporters of InfiLaw have ramped up their efforts in recent days, hoping to influence the decision by asserting arguments about what is best for the school and whether InfiLaw meets the state's criteria for a license.
InfiLaw lawyer Kevin Hall has said he is optimistic about the commission approving the license after staffers recommended approval and the state Attorney General's Office issued an opinion stating the commission has no discretionary authority and must adhere to specific regulations when deciding whether to grant the license.
"We remain confident that we provide the brightest future for continuing the proud traditions and commitment to excellence of the Charleston School of Law," company representatives said in a prepared statement.
What's best for the school?
According to Westbrook, InfiLaw has contributed to the school's self-inflicted downfall that created the crisis, while now claiming to be the white knight coming to the rescue.
First, law school owners borrowed $6 million from InfiLaw to buy out two of the original five owners, Alex Sanders and Ralph McCullough. That put the school in debt, he said.
Then, Westbrook said, he was outvoted by owners George Kosko and Robert Carr on a plan to enter into a costly "management services agreement" with InfiLaw. That further depleted the school's resources.
After the school last summer announced that a possible sale to InfiLaw was in the works, 32 students transferred to other schools and 18 accepted students withdrew. That led to another "seven-figure decline in income," he said.
And finally, Kosko and Carr hired an expensive crisis management firm to help deal with public outrage after they announced the plan to sell to InfiLaw.
Many students, faculty and members of the state's legal community have said academic standards are lower at InfiLaw's three law schools than at the Charleston school. They are opposed to a sale to InfiLaw because they think it would diminish the value of a Charleston School of Law degree.
"The law school was not broken in July 2013," when school owners announced a possible sale to InfiLaw, Westbrook said. "The school had a significant cash reserve, harmonious faculty, enthusiastic student body and support of the community."
Kosko and Carr deferred comment to law school spokesman Andy Brack.
In a prepared statement, Brack said Westbrook's statements were more of the same:
"What is missing - and what has always been missing - is any credible offer by Mr. Westbrook or any group that provides the financial information and strategic plan to purchase and operate the Charleston School of Law as well as evidence that any group would be able to get (commission) licensure and (American Bar Association) accreditation," Brack said.
Westbrook said he believes the wounds the school has suffered in the past year are "InfiLaw-specific," and they will quickly heal if InfiLaw isn't granted a license and doesn't take over the school.
Westbrook said he thinks the school can succeed if it is converted to a nonprofit organization. And, he said, he is willing to donate his one-third share of the school to that group if it is formed.
Westbrook also said he donated all of the money to launch the school, and "going forward, I expect to continue to support the law school financially."
He also said the other current owners are bound to support the school because they have represented to the American Bar Association that they would do so. The owners have received large distributions from the school, Westbrook said, and they should reinvest that money. "That is what owners do, support their business," he said, adding that Kosko and Carr never have invested any money in the school despite taking out substantial sums.
State legislators also have weighed in on the matter. A group of 13 lawmakers, two of them from the Lowcountry, sent a letter to commissioners in February encouraging them to grant the license. Another group of 16 legislators, eight of them from the Lowcountry, sent a letter last month to commissioners cautioning them against granting the license.
The decision on whether to grant InfiLaw an operating license, however, likely hinges more on whether it meets state criteria than whether it would be good for the school, its students, the state or the city of Charleston.
The state Attorney General's Office last week issued an opinion that the commission doesn't have discretion in granting licenses. It must grant InfiLaw a license if the company meets the specified criteria.
But that opinion has not deterred opponents.
A group that is opposed to the commission granting the license, composed of students, alumni and faculty members, sent a letter to commissioners Tuesday telling them they think InfiLaw has failed to meet the criteria in four key areas: quality curriculum, not using misleading advertising, failing to enforce proper admission requirements, and the good character of the institution's owners and directors.
Reach Diane Knich at 843-937-5491 or on Twitter at @dianeknich.