Judge granted Oberlin College’s motion to stay execution of the judgment, but required the posting of a bond in the amount of the judgment plus three years interest as security.
The compensatory and punitive damages of $25 million (after reduction for tort reform caps), plus the over $6.5 million in attorney’s fees and costs, put Oberlin College almost $32 million in debt to Gibson’s Bakery and its owners.
Absent some judicial action, the next step would have been for the Gibsons to execute on the judgment, meaning start collecting the money through post-judgment remedies, such as seizing bank accounts and physical property.
Oberlin College, which intends to appeal once post-trial motions are over, obviously doesn’t want its bank accounts, computer equipment, and er, Dean of Students’ office furniture, seized just as the freshman class was arriving. So Oberlin College filed a motion for a stay of execution of the judgment until such time as it can appeal and obtain an appeal bond.
We covered the parties’ arguments for and against in our prior post, Gibson’s Bakery: “there is serious concern about [Oberlin College’s] ability to pay this sizeable judgment three years from now”. Gibson’s Bakery devoted much of its opposition to arguing for a bond on the basis that Oberlin College was in poor financial shape:
A stay of judgment execution is not automatic under Ohio law for private litigants. Defendants do not have some absolute right to a stay of execution. Should the Court decide, in its discretion under Civ. R. 62(A), that Defendants are entitled to bond off the execution of the judgment, then Plaintiffs request that the bond be set at $36,356,711.56….
The need for such bond is made clear by the College’s own statements about its dire fmancial straits. If the College is to be believed, there is serious concern about its ability to pay this sizeable judgment three years from now. At trial, and in its recent filing, the College represented that there was only $59.1 million of unrestricted endowment funds available to pay any dollar judgment and that $10 million of those funds had already been committed to pay down the College’s existing debt. [Trial Tr., June 12, 2019 at 95:13-21] There remains $190 million of existing debt on the College’s books. [Id.] The College has also testified that it has a significant operating deficit and that its deficit situation is not sustainable…. [Trial Tr., June 12, 2019 atpp. 86:1-6, 88:1-9]
The College also testified at trial that they have experienced a “significant” and “steady” decline of enrollment from 2014 to 2018. [Trial Tr., June 12, 2019 at 79:4-17] In describing their economic position, the College offered Exhibit N-33 at trial, which is its May 10, 2019 report entitled “One Oberlin: The Academic & Administrative Program Review Final Report.” [Trial Tr., June 12, 2019 at pp. 99-100] In that Report, the College describes its alleged financial hardships and warns about how many other private colleges have had to close due to financial difficulties …[Ex. N-33, pp. 4-5].
Thus, we know that Oberlin College could attempt to continue using its available funds to pay down its other debts between now and the filing of a notice of appeal, thereby leaving less available to pay the judgment in this case.