COLUMBIA — A pair of University of Missouri curators are embroiled in a lawsuit over an outside business deal.
Citizens Bank and Trust Co., which is based in Chillicothe and operates 30 branches across northern Missouri and Kansas, is suing a St. Louis development company owned by curators’ Chairwoman Cheryl Walker and her husband over six unpaid loans totaling nearly $2.5 million, excluding interest and late fees. The bank’s board of directors includes Curator Don Walsworth, Walker’s predecessor as the group’s leader.
The lawsuit was filed Nov. 6 in St. Louis Circuit Court and names Walker; her husband, Thomas; and their company, Obasi Enterprises, a limited liability corporation. Walsworth is not named as a party to the lawsuit.
Walsworth said Monday that he was unaware of the suit and did not play any role in the approval of the Walkers’ loans. Walsworth said he owns stock in the publicly traded company but declined to specify his ownership stake.
“I’ve stayed completely at arm’s length,” Walsworth said. “I’ve never reviewed any loans.”
Walker could not be immediately reached for comment Monday. In an October 2007 interview with The Associated Press, she called the business relationship with her colleague’s bank a proper one.
“The fact that Citizens is our lender is not a secret,” Walker said. “Don Walsworth is a minority shareholder of Citizens.”
The nine curators, who are appointed by the governor and oversee the system campuses in Columbia, Rolla, St. Louis and Kansas City, adopted a conflict-of-interest policy in July 2006 that restricts the political appointees from making money off the university until they are out of office for at least two years.
The policy also prohibits curators’ immediate family members from using their relative’s appointment to gain university jobs or contracts. Also, every board member must file an annual disclosure form outlining outside financial interests.
The policy does not explicitly prohibit board members from engaging in outside business relationships not connected to the university.
The lawsuit details a series of loans made by the bank to Obasi Enterprises starting in August 2005 and through Feb. 21 of this year. Repayment plans were subsequently changed on each of the loans — as often as eight times in the case of the first loan of $159,550. The largest loan was for $807,000.
The bank alerted Walker to the loan defaults on Oct. 29, the complaint states, but the company “has failed, neglected and refused to make payment on this indebtdedness.”
According to its Web site, Obasi Enterprises is a residential real estate development company that specializes in urban markets. The company’s projects include two redevelopment projects in St. Louis’ Lafayette Square neighborhood. One of those developments, known as Lloyd on MacKay, consists of a renovated historical church with town homes available to buy starting at $375,000. Pricier units can be bought for $550,000.
Both Walker and Walsworth were appointed to the Board of Curators in 2003 by former Gov. Bob Holden, a Democrat. The two have been consistent allies on the board throughout their tenure, especially after the 2005 appointment of three new members by Gov. Matt Blunt, a Republican. Curators serve six-year terms.
The pair will participate in one final board meeting next month in St. Louis before their terms expire. Gov.-elect Jay Nixon will then make three appointments in 2009, also replacing outgoing board member Marion Cairns.