Archive for Wednesday, May 24, 2000

KU enters Watkins Hall fray

May 24, 2000

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Kansas University on Tuesday called for an end to the court battle over the Watkins Scholarship Hall trust.

The university asked Douglas County District Court Judge Jack Murphy to rule it the sole beneficiary of the trust created by Elizabeth Miller Watkins to run and maintain the scholarship halls that bear her name.

If Murphy decides KU is the only beneficiary of the trust, it would eliminate a possible challenge to a bank's administration of the trust raised by some of the hall's residents.

The residents are asking Murphy to recognize them as beneficiaries of the trust established by Watkins' will in 1939.

In a request for judgment in the matter, the university argues the trust's survival may be jeopardized if Murphy rules the residents are beneficiaries.

"Pursuant to the Internal Revenue Code, the trust must be operated for the exclusive benefit of publicly-supported organizations," the motion reads. "Residents of Watkins and Miller Halls, whether current or former, cannot qualify as a publicly-supported organization."

The residents have asked Murphy to recognize them as beneficiaries so they will have legal standing to raise questions about how Bank of America administers the trust. They want to question whether reports made by Bank of America to the court show how the trust is administered by the university.

Since the mid-1980s, residents and alumnae have criticized the bank's handling of the trust and how the university operates the hall.

"We are completely satisfied with the accounting of the trust by Bank of America," said university spokeswoman Lynn Bretz. "We need to affirm in the strongest way that we are proud of our stewardship of scholarship halls."

"The university does not want trust capital to be eroded by unnecessary litigation expenses," she said.

Bank of America's legal costs responding to the residents' questions are being paid for from trust funds.

David Brown, attorney for the residents, did not reply to a phone message left at his office.

Until Tuesday, the university had not been a participant in the court dispute.

It is uncertain when the judge will make his ruling.

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