ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, November 7, 2006

It's Like Pulling Teeth...

The Denver Post reports that University of Colorado officials have "terminated a contract" with Gasper Lazzara, a donor who reneged on a $95.7 million pledge to its dental school. A consequence? The orthodontics students may see a significant increase in their tuition bills. Lazzara was covering students' tuition and paying them $35,000 annual stipends. In exchange, the students promised to work for Lazzara for seven years after graduation in a national chain of orthodontic clinics.

Ten students in CU's orthodontics residency program sued Lazzara for breach of contract in October, claiming he promised them jobs that paid $150,000 per year, plus profit-sharing and new clinics in the community of their choice.

The deal began to fall apart shortly after the students started the program in August 2004. Stipend payments were three months late, forcing the students to get emergency loans and charge up their credit cards, according to their lawsuit.

Lazzara's Orthodontic Education Company later "greatly reduced" their income projections and told students they might not get new clinics, the lawsuit says.

Lazzara has apparently reneged on pledges to other dental schools at Jacksonville University and the University of Nevada.

Why did Lazzara fail to follow through?

Lazzara did not return phone calls Monday, but he previously acknowledged that his business plan was "too cash-intensive."

Lazzara also blamed a negative "culture" at CU that clashed with his plan to change orthodontics from individual clinics to a brand-name chain similar to Pearle Vision eye clinics.

What about the center for oral-facial health at the University that bears Lazzara's name? The regents have not proposed to change the name:

University leaders were quick to point out that Lazzara's $3 million gift to build the dental school is the largest in school history and that he gave an additional $3.8 million to the program and its students.

* * *

"He's donated more than a lot of other people who have buildings named after them," Wilson said. "His name deserves to be on that building."
* * *
"Had we not assumed some of those risks in 2003, we would not have a new school of dentistry building nor would we have a graduate program in orthodontics," the chancellor said.

[Meredith R. Miller]

In the News | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference It's Like Pulling Teeth...: