Stillwater News Press

May 2, 2013

Court action dropped over $33M Oklahoma State gift insurance

By Russell Hixson
Stillwater NewsPress

STILLWATER, Okla. — Oklahoma State University will no longer try to appeal a ruling that blocked its attempts to recover $33 million in life insurance premiums spent on a failed fundraising plan, a university spokesman said.

“Cowboy Athletics, Inc., has dismissed its appeal from the summary judgment ruling of the Payne County District Court,” OSU Director of Communications Gary Shutt said in an email. “Cowboy Athletics will submit its claim to the insurance company with respect to the death of one of the insureds.”

The fundraising plan ended up costing the university just short of $22 million as the school will still collect on one $10 million policy plus return premiums of $1.2 million on that policy. Shutt said OSU alumnus and mega-donor T. Boone Pickens “covered” the premiums for the program.

The Gift of a Lifetime program dates back to 2005 when representatives from the nonprofit charity Cowboy Athletics, Inc., Pickens and Lincoln National Life Insurance Co. got the idea to raise money by taking out life insurance policies on 27 OSU alumni donors who were over age 65. The Gift of a Lifetime program purportedly was going to raise $350 million for OSU athletics, according to court documents.

After two years, Cowboy Athletics wanted to cancel the policies. Pickens and Oklahoma State University’s athletic fundraising foundation filed the lawsuit in 2010, alleging agents for Lincoln used manipulated data and inflated the benefits of the life insurance strategy.

Lincoln filed a suit in Texas federal court that claimed the university was trying to get out of the $16 million per year premium payments because the aging OSU supporters were not dying.

The 5th U.S. Circuit Court of Appeals ruled in favor of Lincoln, unswayed by claims that Lincoln misled the university with inaccurate and inflated data.