rideraaup_logo2

A Failure of Due Diligence: 
Rider 
University’s Attempt to Sell Westminster Choir College
A White Paper Prepared for the Rider University Chapter of the American Association of University Professors

Dr. Gerald Klein
Dr. Arthur Taylor
Dr. Michael Brogan
May 1, 2018
Overview
On March 28, 2017, Rider University President Gregory Dell’Omo announced a plan to sell the fully-enrolled, world-renowned Westminster Choir College. Since then Dell’Omo and Rider’s Board of Trustees claim to have worked “tirelessly” to select “the best partner, domestic or international, willing to acquire, operate, retain, invest in and grow Westminster in Princeton.” To date, they have provided no evidence to support the assertion that the named buyer — Beijing Kaiwen Education Technology Company — a for-profit company with only two years experience in running K-12 schools in China, has the ability to achieve these goals.
In this white paper the authors analyze publicly available data to conclude the buyer’s finances are precarious. When this conclusion is combined with the facts that Kaiwen is a for-profit company with no experience in higher education or in preparing young adults for professional careers in music, much less the accreditations necessary to run a choir college, the company’s selection by President Dell’Omo and Rider’s Board of Trustees represents a failure to perform due diligence and carry out their fiduciary responsibilities.
 
A Failure of Due Diligence
History of Westminster Sale Efforts
Following its October 2016 meeting Rider’s Board of Trustees under the directionof then-Chair Michael Kennedy created a Westminster Special Committeeconsisting of board members and senior administrative staff. Without solicitinginput from Westminster stakeholders — such as faculty, staff, students, and alumni — they met in secret to determine the future of Westminster Choir College. OnDecember 1, 2016, President Dell’Omo announced their decision to close theWestminster campus, sell the property, and move Westminster’s programs to theLawrenceville campus. For many reasons, including the lack of facilities to supportWestminster’s specialized programs, this decision engendered strong opposition.On March 28, 2017, Dell’Omo and the Board of Trustees announced RiderUniversity would instead sell Westminster, including its donated assets, for whatPresident Dell’Omo claimed would be $40 to $60 million. The process was toadhere to the following set of “guiding principles.”1.Potential to provide short-term and long-term financial stability for WCCand the University as a whole so both institutions are able to move forwardwith a high level of quality2.Commitment to preservation and enhancement of the ongoing integrity ofthe WCC history, brand, mission, artistic standards and programs3.Quality of the potential WCC partner, including its mission, reputation,culture and objectives, and, as possible measures thereof, its studentoutcomes, accreditations, enrollments, tuition and scholarship structure, performance statistics, endowment and giving record, and financial and programmatic resources4.The likelihood of completion of a transaction with the partner, includingfinancial strength, timing, overall complexity, contingencies and conditions5.The interests of WCC stakeholders, including administration, faculty, staff,students, Coalition / Westminster Leadership Council, alumni and donors6.Strong sale proceeds to provide meaningful new program / facilityinvestments in Lawrenceville to grow Rider enrollments7.Impact on Rider’s mission, reputation, culture and objectivesThese principles require a buyer to have appropriate accreditations, financialstrength, and strong performance statistics and financial resources that will provide both short- and long-term financial stability to Westminster. Rider’s Board ofTrustees then hired PwC’s corporate mergers and acquisitions division, a division2