UA System president Donald Bobbitt University of Arkansas

Representatives of the University of Arkansas System kept negotiating with the University of Phoenix even after the UA System’s board of trustees rejected President Donald Bobbitt‘s proposal for a nonprofit affiliate to buy the online university, according to a court document.

The Chronicle of Higher Education reported Tuesday on so-far unsuccessful efforts to sell Phoenix in an article that told of the UA System’s refusal to give up on the purchase even after the board voted it down on April 24. The UA System’s interest in acquiring Phoenix continued into the second half of May, according to the court document which you can read here.

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The document is a statement signed Aug. 13 by Gregory K. Finkelstein, managing director for Tyton Partners, Phoenix’s financial adviser. The document was filed in an Idaho court by the defense in a lawsuit in which the Idaho attorney general contends the Idaho State Board of Education violated an open-meetings law. As a result, he argues, the board’s May 18 vote authorizing the University of Idaho to create a nonprofit to buy Phoenix should be voided.

In his statement, Finkelstein noted that the likelihood of completing a transaction with Party A (the UA System) “was diminished after it failed to garner support from the system’s Board of Trustees.”

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“However, as it was explained to us by Party A, Party A was not necessarily
obligated to obtain the approval of its Board of Trustees in order to acquire UoP,” Finkelstein added.

“Indeed, Party A remained involved in conversations with UoP and Tyton
Partners about potentially acquiring UoP,” he wrote.

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“After April 26, 2023, a representative of Party A informed Tyton Partners that Party A still wanted to pursue a potential acquisition of UoP, though Party A would need additional time to either: (i) build internal support from their Trustees for the previously contemplated transaction; or (ii) bring in external partners to support the acquisition of UoP,” Finkelstein wrote.

“In that conversation, Tyton Partners encouraged Party A to continue to garner the support they needed for a potential transaction,” he added.

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Though the UA System’s board vote took place April 24, Finkelstein repeatedly wrote April 26.

The court document makes clear that negotiations persisted for at least a few weeks beyond the April vote. Finkelstein said the UA system’s “representatives remained active in the negotiation process. Among other things, representatives of Party A accessed the virtual data room Tyton Partners was maintaining on UoP’s behalf multiple times following April 26, 2023, including in the second half of May 2023.”

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Remember it wasn’t until the second half of May that the Idaho State Board of Education gave a thumbs-up to the Phoenix effort.

Asked about the Chronicle article and the court document, UA System spokesman Nate Hinkel said in an email today,  “As you know, the Board of Trustees had a chance to examine a proposal to affiliate with University of Phoenix last April and chose not to support moving forward. Soon after, Phoenix and the University of Idaho began a path toward acquisition. As a result of those two things, the UA System is no longer pursuing this project. We do not comment on pending litigation or on a potential transaction that does not involve the UA System.”

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Asked then if he was neither confirming nor denying the court document, Hinkel replied, “We do not comment on pending litigation. It’s a long standing policy. Nevertheless, I believe I have provided you the substance of where this stands as far as the UA System is concerned.

“I would appreciate it if you would use my entire response in whatever story you are writing as it makes it pretty clear that there is no pursuit of this project as a result of not having support of our board and also what’s unfolded in Idaho.”

The Chronicle of Higher Education article and court documents don’t answer every question, and I’m still left with a few.

Did Bobbitt’s efforts to acquire Phoenix persist after UA System trustees said no, but stop after the Idaho effort moved forward? If so, should he have told the board he was going to continue? Did he tell the board, or at least some trustees?

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We know there were concerns about whether Bobbitt would seek a board vote on the Phoenix effort. He did, of course. But did he have much of a choice by that point?

And most importantly, what do the trustees think of these developments? I’ve emailed them seeking comment.