February 28, 2018

Identity of Westminster Buyer Heightens Concerns

By Anne Levin

Last week, Rider University revealed the identity of the company that is the prospective buyer for Westminster Choir College, with which Rider merged in 1991. Kaiwen Education Technology Company of China signed a non-binding term sheet for the $40 million purchase of Westminster’s Princeton campus, facilities, and programs. 

Contrary to providing a sigh of relief, the news has members of the Westminster community more concerned than ever about the proposed deal. The word “outrage” is used in a press release from Rider’s chapter of the American Association of University Professors (AAUP), which cites the fact that Kaiwen changed its name only two months ago from Jiangsu Zhongtai Bridge Steel Structure Co. Ltd. The prospective buyer owns two Chinese K-12 academies, which were established only a few years ago.

“We were sold on the idea that they’ve had extensive experience in education,” said Elizabeth Scheiber, the chapter president and a professor of French and Italian at Westminster. “But it looks like it’s only recent experience. The website doesn’t look like they’re even doing high school right now. They don’t have a lot of experience in education at all. That has some alarm bells going off, to say the least.”

First announced last year, the sale of the renowned music school — which also includes the community music school Westminster Conservatory — is controversial. It is the subject of two lawsuits, one of which, from Princeton Theological Seminary, was announced a day before Kaiwen was named.

“It’s inconceivable that there could be any sale if there are lawsuits that need to be solved,” said Bruce Afran, the attorney representing alumni in one of those suits, which is in federal court. “If they attempt it, we will seek injunctions.”

Princeton Seminary’s suit claims that donor Sophia Strong Taylor gave 28 acres of land to Westminster in 1935, and the terms required Westminster to always operate as a choir college. The federal suit challenges the legal right to sell the college, according to the terms of the 1991 merger with Rider.

“There is no contract, only a non-binding term sheet right now,” Afran said. “There may never be a contract, we don’t know. But normally, nobody sells land when lawsuits are pending challenging the right to pass title. The terms are not known by anybody so no one can tell whether this buyer intends to act in good faith or not. It shows that they’re having difficulty reaching an agreement, because of the lawsuits. If after nearly a year you still can’t get a deal together, that’s a problem.”

In the press release from the AAUP chapter, Scheiber said that in its own announcement of the proposed deal, Kaiwen stated it is purchasing the college to increase its own profitability. Jeffrey Halpern, the contract administrator of the AAUP and an associate professor of sociology, said, “We believe that goal can only be accomplished by stripping Westminster of its assets, laying off faculty and administrators, and then closing it and converting the land and buildings to other purposes — further evidence that Rider’s administration, with approval of Rider’s Board of Trustees, is acting in complete disregard of both its legal and moral obligations to Westminster Choir College.”

The University maintains that it is acting in Westminster’s best interest. “We chose to partner with Kaiwen Education because we believe that they are the best entity to continue operating Westminster in Princeton and building upon its legacy,” said spokesperson Kristine A. Brown. “Kaiwen Education has a strong interest, vision, and the necessary resources needed to make the transition a successful one. We are close to reaching that goal and look forward to introducing Kaiwen Education to the campus community very soon.”

Brown added information provided by Kaiwen and attributed to them stating that the company “was in the business of manufacturing the steel structures for building the bridges. Thus it has never been in the ‘steel’ business. The company “exited the steel bridge structure business on November 24, 2017 and will be no longer be in the steel bridge structure business in the future (The Board publicly disclosed its resolution on this exit on December 28, 2017.)”

Further, Brown cites Kaiwen as saying its main business is education and the activities related to education. “In the future, it will concentrate its resources in education,” and “The name change to Kaiwen Education is to more accurately reflect its true business.”

Rider originally said the sale of Westminster would help stem budget shortfalls. The press release from AAUP charges that the University is not being honest about the size of the potential deal. “The net transaction for any sale of Westminster must account for the significant assets Rider would relinquish, including $20 million of Rider’s already small endowment, at least $8 million in a mortgage on the property that will have to be paid back before any sale is complete, and the costs relating to the sale itself,” the release reads.

Arthur Taylor, a member of the AAUP executive committee and a professor of information systems, said, “President [Gregory] Dell’Omo’s boast of a $40 million deal would be reduced by at least $29 million, not to mention the cost of the very expensive ongoing litigation concerning the sale. At best, the net proceeds from such a transaction would be in the range of $10 to $12 million.”

Scheiber said morale has suffered at Westminster, and donations to the school have decreased. “We’re very concerned. Even if Rider manages to do this, it doesn’t look like a positive step forward for students, the campus, and the community,” she said.

Rider’s board should rescind its decision to sell, the AAUP release concludes. The AAUP is “ready and willing to work with [the board] to find a way forward that does not ignore the academic mission of the institution and destroy the cultural gem, which is Westminster Choir College.”