Fact Sheet

Court Decisions to Date:

On June 20, 2003, Judge Neil Shuster of the Superior Court of New Jersey, Mercer County, denied the defendants’ motion to dismiss the lawsuit. The Court found that: “From these allegations, it is sufficiently pled that each University Trustee had divided loyalties and possible extraneous considerations or influences. Thus the court holds that Plaintiffs have pled sufficient facts which create a reasonable doubt that a majority of the Board was disinterested and acted independently.” (Civil Action Order, Docket Number C-99-02).  The defendants moved for “leave to appeal” the ruling on their motion to dismiss, but they were denied by the appellate court.

In October 2004, Judge Shuster granted the plaintiffs’ request to amend their original complaint, rejecting Princeton’s assertion that the new complaint’s allegations were improper, “scandalous and abusive.” The amended complaint includes charges of fraud against Princeton. In his decision, Judge Shuster said the “extensive factual allegations” speak for themselves.

On October 25, 2007, Judge Shuster issued more than 350 pages of detailed opinions in ruling on seven motions for partial summary judgment, and he sided with the Robertson family on most key issues, including the two most important issues that the court was asked to decide prior to trial: whether Princeton has a fiduciary duty to the Foundation to use its money only for its intended purpose and whether the Court can sever Princeton’s control of the Foundation if the Robertsons prove their charges.

Judge Shuster minced no words regarding the university’s obligation to be a faithful fiduciary, holding that “the University clearly has a fiduciary duty of care, good faith and loyalty, and a duty to ensure that [Foundation] expenditures are consistent with the Foundation mission.” Fiduciary Duty/Business Judgment Ruling, p. 65.  He also held that Princeton has a duty of disclosure to the Foundation Board and that it “would be an act of disloyalty to actively or purposefully conceal or prevent the dissemination of material information to the Foundation Board.” Fiduciary Duty/Business Judgment Ruling, p. 65.

Judge Shuster also denied Princeton’s claim that the university was the “sole beneficiary” of the gift, and he made it abundantly clear that if the family proves “egregious and nefarious” conduct on the part of the university, the court would be justified in removing Princeton’s control of – and involvement in – the Robertson Foundation.  Sole Beneficiary Ruling, page 33.  He stated that the fact that the Certificate states that Foundation funds are to be directed to the University “should not be construed to mean that the donors intended for Foundation funds to remain at the University forever.  Nor should this be interpreted as a judicial finding that the donors intended for the University to be primary beneficiary, or that funding the School was their only purpose and objective in creating the Foundation.”  Sole Beneficiary Ruling, page 28.