BENNINGTON >> Southern Vermont College has dropped a lawsuit against two insurance companies over the reimbursement of funds embezzled by SVC's former president, James Beckwith.
The suit was filed in April 2015, and was voluntarily dropped by SVC with prejudice, meaning it cannot be appealed at a later date. According to court papers, the policy SVC had through the two New Hampshire-based insurance companies, Peerless Insurance and Excelsior Insurance Company, required the companies to pay SVC damages from a loss covered by the policy, up to $500,000. These payments were completed in July of 2013, in regards to the Beckwith incident.
However, according to SVC, the policy also stated that SVC must be reimbursed for any losses the college sustained, before any recovered funds should be directed to the insurance providers. But when SVC made a remission request to the federal government, which had recovered the funds from Beckwith's estate, the insurance companies also submitted a claim for the $500,000 they had paid out to SVC, which the government deducted from the $835,542 that was eventually awarded to the college. The college estimated that its total damages from the incident are even higher than the $1,128,660.39 loss from Beckwith's embezzlement, once legal fees and other expenses directly caused by the incident are included, meaning that had not yet been properly reimbursed.
"We voluntarily dropped the suit when we received the money, which had been conditioned on the insurance company agreeing to do what we were asking, which was to consent that we were entitled to some funds from the Beckwith matter that were in question because they might have overlapped with funds we got from the insurance settlement," said college President David Evans on Thursday, "In other words, we had to show that our losses were equal to or greater than the sum of the insurance settlement and the money from the Beckwith assets; had they not been, some of that money would have had to go back to the insurance company."
"We did indeed receive the funds back in December, which precipitated our dropping the suit," said Evans, "Unfortunately, a large portion of the money was consumed by related legal fees, but that's what you get. The money did enable us to settle all of the related legal fees up to that time, at least, which was timely and helpful."
Beckwith, who served as chief operating officer and chief financial officer, as well acting president for a period of time from 2012 to 2013, while then-president Karen Gross was on leave, stole approximately $850,000 from the college between 2011 and 2013, in addition to about $280,000 in salary and benefits. Under Vermont state law, an employee forfeits his or her salary if the individual takes dishonest action that is more than trivial against the employer, totaling $1,128,660.39 in pecuniary losses, or money directly stolen. Beckwith tendered his resignation in January 2013, and committed suicide in February of that year.
Derek Carson can be reached for comment at 802-447-7567, ext. 122.