Judge Puts Another Pause on Mills College Merger, Allows Financial Document Review

A superior court judge in Alameda County has ordered Mills College to provide financial documents to an alumnae trustee before any vote takes place on a potential merger with Northeastern University.

In a hearing Monday, Judge Stephen Pulido granted, in part, Mills College alum trustee Dr. Viji Nakka-Cammauf’s request for documents related to the financial health of the institution — including planning documents, term sheets and financial data. The documents must be delivered electronically by the end of the day on Aug. 18.

The court also issued a temporary injunction that prevents Mills College from entering any new contracts or commitments related to the future of the college. That order will expire on Sept. 3 at 5 p.m., after which the board of trustees (which governs the college) would be able to proceed with a vote on the merger.

“Thankfully, the Alameda County Superior Court has intervened and ruled in favor of truth and transparency about the future of Mills College, which otherwise would continue moving forward with a merger that’s been shrouded in secrecy,” said Alexa Pagonas, vice president of the Alumnae Association of Mills College (AAMC) Board of Governors in a press release. “I’m thankful the Court realized the important and historic nature of this decision.”

In a press release late Monday, Mills College President Elizabeth Hillman said the school would provide the financial records per Judge Pulido’s decision, and called “the continued pursuit” of a merger with Northeastern “vital to advancing the mission of Mills and to ensuring opportunities for our students, our faculty and staff, our alumnae and the broader Oakland community.”

Access to financial documents

Back in March, Hillman said in a letter that the college would cease to be a degree-granting institution in 2023, citing “the economic burdens of the COVID-19 pandemic, structural changes across higher education, and Mills’ declining enrollment and budget deficits.”

Months later — after Hillman announced that Mills would seek a merger with the Boston-based Northeastern University — some alumnae members of the board of trustees filed a lawsuit in Alameda County Superior Court to get more information.

They allege, in court documents, that the college is denying them access to crucial financial documents that are essential in exercising their “fiduciary duties” to Mills. And that there should be a review of that information before any merger is considered.

While the college was originally willing to allow the plaintiff and AAMC President Nakka-Cammauf to review the documents, it was only under very limited circumstances.

“The [AAMC] president was told she could basically sit in a room by herself with a ton of documents, thousands and thousands of pages printed out, but not make any copies and not discuss them with a lawyer or accountant,” Pagonas told KQED. “It’s like looking for a needle in a haystack.”

The lawsuit is aimed at allowing Nakka-Cammauf to review the documents in the presence of an expert. In court Monday, Judge Pulido seemed confused as to why the college was putting conditions around viewing the documents.

“I’m a little surprised why these documents can’t just get produced,” Pulido said. “I’ll tell you right now, to tell a trustee that they’ve got to go alone into some room and review them without assistance from a professional … That’s not going to work. There’s got to be a better way.”

Pausing a merger

The judge also put on hold the college’s proposed deal with Northeastern University, a contentious merger that is at the heart of the issue for several concerned alumnae. Mills officials originally announced they would pursue the merger in early June, which some alumnae felt was a very fast decision.

“We’re still trying to deal with what happened in March. So talking about new suitors seems to assume that there’s a reason we need to talk about new suitors,” Pagonas said. “My analogy to that is somebody asking me, you know, where in Los Angeles I would like to buy a house when I sell mine? I haven’t decided to sell my house. So until I decide that I need to actually move, it seems kind of silly to be looking at other properties.”

Essentially, they want a better idea of what the entire financial situation is at Mills before a decision is made about entering into a relationship with any other institution.

But attorney Stephanie Yonekura, who represents Mills President Hillman in the lawsuit, alleged that the ongoing delays in the deal were causing significant financial harm to the college, exacerbating its precipitous situation.

“Even if we talk about the little delay that has been at issue so far, it has caused harm to students,” Yonekura said in court. “The students are entering and having their first day of college in about less than 10 days, and they are being forced to make a decision whether or not to come to the school, not knowing if they’re going to be able to continue with their college career there and obtain a degree or whether or not the college will be even operational for the rest of the school year.”

Yonekura also said the delay is affecting faculty and staff as well.

In a declaration submitted to the court, Hillman said the lawsuit was also contributing to staff instability. The document says that, so far, three staff members at the college have resigned, with one citing “growing concerns about the future of Mills” as a reason.

According to Yonekura, the college could run out of cash as early as November or December of this year, and “under any circumstances will run out of cash by February of 2022.”

The AAMC conducted a survey in early July asking if alums want them to pursue legal action against the college. The survey was sent to 4,000 alums, and out of the 755 responses, 83% said they want the action to go forward, though respondents were somewhat split on how much money the association should pour into the legal fight.

However, not all alumnae agreed the lawsuit is the best step forward — or that the survey is an accurate representation of how most alumnae feel.

On Aug. 10, 14 alumnae trustees signed a letter stating that the AAMC lawsuit “is ill considered, divisive, and detrimental to the future of Mills” and that their actions are “putting at great risk the futures of current students, faculty, and staff.”

Additionally, in a message to the Mills community on Aug. 6, Hillman alleged that the alumnae association’s reluctance to see the college change was actively harming it.

“Because the alumnae association prefers that Mills not change, it is funding a lawsuit that could force Mills to cut expenses, sell assets, and risk closure rather than work with Northeastern to create a new educational model and achieve financial stability,” Hillman wrote.

In response, AAMC Vice President Pagonas told KQED that the assertion was “purposefully misleading.”

“We have, in fact, always been supportive of the college. We are, in fact, supportive of evolution and change. We are also supportive of truth and transparency. And so we believe all of us can work together,” she said. “And to say that we’re just trying to hurt the college or we don’t want change …  is categorically untrue.”