The Indiana state teachers union's insurance fund has filed a lawsuit alleging former officials, financial advisers and consultants mismanaged a long-term disability insurance trust.
The lawsuit was filed Thursday in Marion Superior Court by Ed Sullivan, The Indianapolis Star reported Friday. Sullivan was appointed sole trustee over the Indiana State Teachers Association and its insurance fund in May as part of a takeover by its parent, the National Education Association.
Teachers already had filed a lawsuit seeking to recover damages from ISTA and many of the same defendants.
ISTA's suit names Warren L. Williams, ISTA's former executive director, who resigned in May, and Robert Frankel, the fund's former director, among several defendants.
The fund's value plunged to near bankruptcy during the last two years, leaving disability benefits for 650 school employees in jeopardy with a projected $45 million to $65 million shortfall in the next 15 to 20 years.
Both NEA and ISTA officials have said since the NEA takeover that the organizations would cover all future claims. ISTA has sold its downtown Indianapolis building to the NEA to raise money and also has issued layoff notices to at least 40 employees.
ISTA chose not to sue the trust's former board members, its attorneys said.
The lawsuit claims Williams and investment adviser David Karandos placed an unusually high percentage of investments in hedge funds and high-risk equities that are not publicly traded, without the board's consent and in violation of a 2004 investment policy.
ISTA's lawsuit also names: Karandos and the companies where he worked, UBS Financial Services and most recently Morgan Stanley; Wisconsin-based Huttleston Associates, which served as a consultant and program administrator; Kansas-based McInnes Maggart Consulting Group, which was a consultant on ISTA's medical insurance programs; and Illinois-based Crowe Horwath, which served as the trust's auditor.
Claims include breach of trust and fiduciary duty, negligence, constructive fraud, conspiracy, aiding and abetting, and professional malpractice.
The Associated Press left a message seeking comment Friday at a telephone listing for a Warren L. Williams in Indianapolis. There was no answer at a residential listing for Karandos, and Morgan Stanley offices in Indianapolis said he did not work there. No residential listing for Frankel could be found.
Education/Schools
Indiana teachers union insurance fund files lawsuit
- Education/Schools
-
-
THE 'V' WORD: SUB: Prosser Career Education Center moves away from stigma of ‘vocational’ school
-
New theater directors at NAHS and FCHS ready for their programs
As the curtain falls on the careers of the teachers who put the theater programs of Floyd Central and New Albany high schools on the map, the new blood coming in have big hopes for the programs they’re taking over.
-
Corden Porter purchase tabled again
The council expressed other concerns, including the potential for asbestos in the building, the costs to cover utility payments and the costs to renovate the building.
-
State takeover of failing schools meets resistance
Under the law, the state can step in and turn the failing school over to a private operator.
Seven schools in Indiana located in high-poverty school districts in Gary and Indianapolis are set to be taken over this coming school year. -
A special honor: Georgetown teacher honored for work with special needs students
-
Distance learning: African educator visits New Albany
-
VIDEO: 'Ring of fire' solar eclipse
The solar eclipse that took place Sunday evening was an annular eclipse, one in which the moon blocks almost all of the sun. Some of the best viewing was in Asia, as with this video filmed in Japan.
-
Jerry Finn wins distinguished alumni award
Finn’s service on several boards has helped high school students start philanthropic organizations. He said teaching youth the importance of giving back is not only good for the communities, but also for the children.
-
STRETCHING AROUND THE GLOBE: International day at Fairmont
-
No shirt, no shoes, no contest: Highland Hills celebrates Tom Sawyer Day
- More Education/Schools Headlines
-
