To Sue or Not, That is the Question

Click the picture (or here for a PDF of the article Duke University Makes Claim on Estate of Aubrey McClendon – WSJ) and check out an article about how Duke University filed a claim against the estate of the late Aubrey McClendon for close to $10 million in unfulfilled pledges.

We have no doubt that the pledges were legally binding.

What we should be doubting is whether this was the right move by Duke or not.  $10 million is a decent amount of money, even for Duke and its $6+ billion dollar endowment.

But here are a few questions I would have hoped Duke considered before embarking down this road:

• What is the likelihood that this story will end up on the front page of the Wall Street Journal – embarrassing the university and possibly sending a chill towards major donors making legally binding commitments (by the way, someone from Princeton told me that their policy is make all pledges NON-legally binding)?
• What is the likelihood Duke will receive their share considering Mr. McClendon may not have any wealth left by the time they get to unsecured creditors like Duke?
• What if it turns out that Duke will be taking funds while McClendon’s widow and/or kids receive nothing due to the state of his finances?

I am a huge fan of using legally binding pledge commitments when appropriate and even filing claims to collect on them – when appropriate.

But here, I wonder if this was the right move.  I know they had to file a claim before the deadline – and only afterwards will they know the answer as to whether there is enough to go around.  Still, the first negative bullet point already came to fruition today.