HotChalk, an education technology company, is suing the parent of its former partner Concordia University, in Portland, Ore., for $302 million, The Oregonian has reported. Concordia announced its permanent closure in February. HotChalk has alleged it was defrauded.
The technology company claims that Concordia transferred several valuable assets to its parent, the Lutheran Church Missouri Synod, just days before announcing closure.
Before closure, Concordia was behind on payments to HotChalk, which ran the university's online courses. In 2018, the two had entered a 20-year agreement.
HotChalk alleges that Concordia transferred property deeds to the synod, while the university was also in default to the synod's financial arm. Those transfers benefited the synod in the amount of $30 million at the expense of other creditors, HotChalk claims.
The company also claims that the synod starved the university for operating funds after it refused to shut down its Gender and Sexuality Resource Center. The Missouri Synod is one of the most conservative branches of the Lutheran Church. HotChalk claims Concordia could have survived if it had cut expenses.
Previous reporting from The Oregonian revealed that Concordia was regularly paying a third of its revenue to HotChalk, though that share increased to 50 percent in 2019. The financial success of the deal depended on aggressive enrollment goals, officials had said privately. When those were not met, the university had no money left to pay.
On Friday, the newspaper reported that neither the university nor its lawyers could be reached for comment.