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Penn State signals it wants to settle Sandusky cases

With the former Penn State assistant coach now behind bars, the university has given an unusual signal that it wants to wrap up civil suits quickly, legal observers say.
/ Source: Reuters

With former Penn State coach Jerry Sandusky now behind bars for child sexual abuse, the university has given an unusual signal that it wants to wrap up civil suits as fast as possible, legal observers said on Saturday.

Shortly after Sandusky, 68, was convicted late on Friday on 45 counts of sexual abuse, Pennsylvania State University invited victims to try to resolve claims against the school.

"The purpose of the program is simple - the university wants to provide a forum where the university can privately, expeditiously and fairly address the victims' concerns and compensate them for claims relating to the university," it said in a statement.

Sandusky's conviction clears a hurdle for potentially big-ticket civil suits since abuse victims suing the school now can point to a crime that was committed, the observers said.

At least two civil suits have been filed already against the school, both in Philadelphia. A filing by Sandusky's lawyers last month put the number of potential victims at almost 20.

"The biggest problem for Penn State is that they want to get these cases closed. They want them behind them and they are going to want to spend some money to make that happen," said Daniel Filler, a law professor at Drexel University.

Max Kennerly, a Philadelphia lawyer who has handled sex abuse cases, said the university's statement was unusual.

The move is a sign Penn State is willing to stay away from the "usual pattern of deny, delay, defend -- the 'three Ds' of corporate insurance defense," he said.

Penn State's potential damage from civil suits could become clearer with a criminal case against the school's former athletic director, Tim Curley and Gary Schultz, the former vice president for finance and business.

A former assistant coach, Mike McQueary, testified he told late head coach Joe Paterno, Curley and Schultz about a 2001 incident in which Sandusky abused a boy in a Penn State locker room.

Curley and Schultz face charges of perjury and failure to report suspected abuse in an alleged cover-up of the incident.

"Schultz and Curley will tell us a lot more about what Penn State knew" about Sandusky's pedophilia, Kennerly said.

Fat target
Penn State had $4.6 billion in operating revenue reported for the last fiscal year and an endowment topping $1.8 billion.

The university is involved in a legal battle with its main liability insurer, Pennsylvania Manufacturers' Association Insurance Co, over who should have to pay for any civil suits in the Sandusky scandal. It also owns its own insurer, Nittany Insurance Co of Vermont.

"The real money is in the big institution, Penn State, and insurance companies. The individuals (in the criminal suits) are just conduits to the insurance companies," said Filler.

Pedophilia suits against Roman Catholic priests have generated damages ranging from $50,000 to several million dollars per victim and are a potential guideline for payouts in the Penn State case, Kennerly said.

"It could be $1 million for each of them," he said.

Because of the Sandusky scandal, Penn State is facing investigations by the FBI, the U.S. Department of Education, the National Collegiate Athletic Association, a grand jury and the U.S. Attorney for the Middle District of Pennsylvania.