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Princeton–Robertson Case Teaches Lessons to University Development Officers

PrincetonUniversity's settlement with the Robertson family, represented by Seth Lapidow and Stephen Orlofsky of Blank Rome’s Princeton office, has garnered nationwide attention in the press and on campuses.  Princeton University will pay $90 million to settle a claim that it misused a multimillion-dollar gift received in 1961 from the heirs to the A&P Supermarket fortune.  The plaintiffs claimed Princeton had fraudulently diverted the proceeds from the original purpose, to prepare students at Princeton's Woodrow Wilson School of Public and International Affairs for government service.

The Wall Street Journal described the case as a key test of how closely schools must adhere to donors' intent.

The New York Times stated that the lengthy litigation has been an embarrassment to Princeton, and a worst-case scenario to university development officers.

In the New Jersey Law Journal, Mr. Lapidow said, "this case highlighted and made people realize that donor restrictions are more than just words and the recipients of restricted gifts can be held accountable." 

Newark’s Star-Ledger said experts in charitable giving viewed the settlement as a victory for the heirs of the late Charles and Marie Robertson.

The Trenton Times described the case as the largest lawsuit in history over the intentions of a charitable donor, with Princeton agreeing to give up more than $50 million from a foundation it partially controls and pay $40 million to compensate the donor family for its legal expenses.

The Princeton Packet noted that the Robertson case has broader implications for the university and nonprofit community over their adherence to the intent of donors.

The Associated Press distributed this news story to countless media outlets, reporting how the six-year-old legal saga was closely followed by nonprofits nationwide as a cautionary tale of what can go wrong when a donor's family and the gift's recipient fall into disagreement over how it should be spent.

Bloomberg News highlighted the Robertsons’ claim that the school didn’t honor its vision and that only 5 percent of the WilsonSchool’s alumni work for the federal government in international relations.

“Princeton Agrees to $90 Million Settlement of Suit Alleging Misuse of Endowment” by Henry Gottlieb, appeared in the New Jersey Law Journal on December 11, 2008.  For more information on the New Jersey Law Journal article, please click here.

"Princeton Settles Suit Over Big Donation, Agrees to Pay Family About $100 Million" by John Hechinger, appeared in the Wall Street Journal on December 11, 2008.

“Princeton Settles Money Battle Over Gift” by Tamar Lewin, appeared in the New York Times on December 10, 2008.

“Princeton Settles Battle Over Millions” appeared, in the Star-Ledger News on December 11, 2008.

Princeton, Donor Family Settle” by Meir Rinde, appeared in the Trenton Times on December 11, 2008.

Princeton:  Endowment Suit Settlement Avoids ‘Bleak House’  by Lauren Otis, appeared in the Princeton Packet on December 12, 2008.

“Princeton Settles Suit, Keeps Control of Donation” by Justin Pope, was distributed by the Associated Press on December 11, 2008.

“Princeton Settles Lawsuit Over $900 Million Endowment” by Oliver Saley and Janet Frankston Lorin, appeared in Bloomberg News on December 10, 2008.