KIRKWOOD, Mo. -- The Lutheran Church-Missouri Synod, which is retrenching as it loses membership nationwide, has been named in a lawsuit alleging fraud and other claims stemming from the latest closing of an affiliated university.
HotChalk Inc., a California-based firm that helped Concordia University-Portland develop and support online degree programs, alleges more than $302 million in damages, according to the lawsuit filed Friday in Oregon state court. The Concordia University System and Missouri Synod, both based here, and the Lutheran Church Extension Fund, of nearby Sunset Hills, were also named as defendants.
Concordia University-Portland, which dated to 1905, closed in February, surprising HotChalk. The firm alleges that it was kept in the dark about the abrupt chain of events, including "eleventh-hour giveaways" to divert assets from unsecured creditors.
"HotChalk was not the only victim of Concordia's deceptive and high-handed practices," the lawsuit argues. "Concordia's donors were victims. Concordia's students were also victims."
The lawsuit signals broader struggles. The closure of the university happened after Concordia College Alabama, an historic black college in Selma, shuttered in 2018. Eight colleges and universities remain in the Concordia system, a drop that illustrates the shrinking footprint of the Missouri Synod.
The Protestant denomination has fallen below 2 million baptized members, with hundreds of thousands expected to die off in the next decade or so. The Rev. Matthew Harrison, president of the Missouri Synod, has tried to preserve the church's traditional teachings while wrangling with the realities of a smaller budget.
In early 2018, Harrison told a gathering of church leaders in Indiana that Concordia College Alabama not only struggled financially but hadn't sent anybody to either of the Missouri Synod's seminaries in Clayton or Fort Wayne in a decade. The seminaries, similar to the network of colleges and universities, are supposed to help produce future leaders of the global church mission.
In the speech, Harrison also discussed Concordia University-Portland, where he said he'd put his foot down for allowing a gay student club to begin about eight years prior that ended up flourishing.
"That morphed into a gay advocacy club that was posting trans photos and all kinds of offensive stuff on its Facebook page," Harrison said of the club. What's more, he said, the leader of the group was a young man whose husband was elected student body president.
Harrison said he'd sent a letter to the Board of Regents saying "this must stop" because it is "contrary to the doctrine and practice of the Missouri Synod." He said the university responded by eliminating all clubs and chartering them anew in an "acceptable way."