JCC and Bank of America reach deal on lawsuit

By David Baugher, Special to the Jewish Light

After months of litigation, Bank of America and the Jewish Community Center have reached a deal that would end the bank’s multi-million lawsuit, the JCC said in a release late Friday. The lawsuit stemmed from the repayment of debt incurred to fund improvements at the JCC. 

“Obviously, we’re thrilled that we have come to an agreement with the bank where we can put this chapter behind us,” said Lynn Wittels, president and CEO of the JCC in an interview with the Jewish Light, “but mostly we’re excited about helping to secure a solid future for the agency.”

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The financial giant originally launched the suit in March, alleging that the JCC was withholding $4 million in payments on bond redemptions and a line of credit in an attempt to pressure the bank to change the terms of $45 million in bonds that had been issued in 2007 to pay for a wide-ranging facilities revamp.

The JCC said its financial picture had darkened due to the economic crisis which struck the following year while Bank of America maintained that the organization still had the ability to pay.

The case took a dramatic turn in July when Missouri Attorney General Chris Koster filed papers to intervene in the matter under federal rules governing the public’s interest in protecting philanthropic assets.

The exact terms of the announced agreement were confidential. 

A spokesman for the bank said she confirm that a deal had been reached but could not provide further details.  

Wittels lauded the settlement as a positive development.

“We think we have a financial model that this agency can sustain for many years and generations to come,” Wittels said. “We will continue to rely on the generosity of our donors and we will continue to rely on people who come to the J to work out, send their kids to early childhood or to camp. But this agency has been here for more than 130 years and we look forward to the next 130 years of growth and meeting important community needs.”

Jonathan Deutsch, chair of the J’s Board of Directors said Wittels had done a great job for the organization as the suit took its course.

“We’re pleased to reach an agreement with Bank of America which will allow us to focus on delivering excellence in all of our programs and services throughout the agency,” he said. “I think we were able to, over the last 18 months, do an admirable job of focusing on this but now we can allow 100 percent from our board of directors and our staff in focusing on the future and agency growth.”

Former board chair Michael Staenberg said it had been a team effort by a lot of people to get to this point. In the end, he said he saw the experience as an opportunity as much as a challenge.

“It made us refocus, make sure our mission is right, make sure our business plan is right,” he said.

Wittels thanked the entire community for their support and specifically noted the assistance the agency received from local community members Sam Fox, a prominent businessman and former ambassador to Belgium, and Staenberg, a real estate developer who was the driving force behind the construction of the new JCC facility in Creve Coeur which bears his family name.

“I can tell you that there was a small team of people who worked very hard for a long time to get here and we’ve had incredible support from the community to get where we are,” said Wittels.

She said it was unclear what role the attorney general’s action might have played in the case’s resolution.

“We’ll never really know exactly what the formula was but I think it was very helpful that we had not only the endorsement from the attorney general of the value the J has in the community,” she said, “but also the fact that he was willing to sit at the table and be part of the suit on behalf of the State of Missouri and the assets of a not-for-profit. I think that was helpful.”

Wittels said that the JCC, which has bolstered its finances and membership sharply after the construction of the Staenberg facility after years of stubborn deficits, is now looking to push for more revenue.

“We are still working to raise a little bit more money,” she said. “We have a model that can work but we still hope to raise a little bit more to have a little bit of wiggle room and replenish our funds. This was a big step today.”

Deutsch said he feels the JCC’s funding goals are attainable.

“We’ve had tremendous support when we’ve set our targets for raising funds,” he said. “We’ve had tremendous support from the community. We’re very optimistic as we reach out to additional donors that we will be able to raise the additional funds we’d like to put the agency in the most optimal position.”

Staenberg said the organization’s fiscal picture is a promising one that could eventually see it become debt-free in the future.

“It means there will be a long-term JCC for the next 20 or 30 years in St. Louis,” he said.

The deal, which is set to close at the end of March, still must be approved by the court, Wittels said.