A federal judge has ruled that Oklahoma State University cannot recoup $33 million invested in life insurance policies for 27 athletics boosters naming the university as beneficiary. The unique "Gift of a Lifetime" fundraiser, launched in 2007 at the suggestion of oil tycoon and OSU alum T. Boone Pickens, was expected to create a $350 million windfall for the school's athletic department.
OSU later abandoned the plan and attempted to recoup the premiums it had already paid. Judge Jorge A. Solis ruled that Lincoln National Life Insurance Co. should keep the premiums as the first two yearly payments for the policies, according to an Associated Press report.
The university argued that it had a right to cancel the policies and get its money back because Oklahoma law provides for a 10-day review window after policies are purchased, and that Lincoln National Life Insurance did not provide actual copies of the policies until 2009.
In fact, athletic director Mike Holder had signed policy delivery receipt forms two years earlier, but didn't ask to see full copies from the insurance company, which had kept them, according to the AP. Oklahoma State proceeded to pay premiums of more than $16 million for the next two years before attempting to back out of the plan.
Solis ruled that Holder technically had received the policies on behalf of Cowboy Athletics Inc., the private foundation run by OSU's athletic department.
The insurance company and brokers argued that the plan fell apart because Oklahoma State rushed into it without first arranging financing to pay for the premiums. The school was unwilling to use Pickens' $165 million donation to the athletic department as collateral on a loan. That fund eventually dwindled as the U.S. economy tanked, forcing the school to scrap plans for construction of an athletic complex and scramble to merely complete its football stadium renovation.
