Judge: Assets transfer done to defraud SU Foundation

Former Southern University System President Ralph Slaughter intended to defraud the SU System Foundation by transferring much of his estate to his wife last year while the private group was seeking to recover nearly half a million dollars from him, a judge ruled Thursday.

State District Judge Tim Kelley’s ruling allows the foundation to attempt to seize the Slaughters’ Moss Side Lane home, automobiles and other property in order to collect $475,000 — plus running legal interest — that the judge ordered Slaughter to pay the foundation last summer.

“The foundation’s waited a long time” to collect the money that it sued for in late 2009, foundation attorney Preston Castille Jr. said outside the 19th Judicial District Courthouse following a three-hour hearing. “We look forward to going after that judgment.”

Slaughter’s attorney, John McLindon, said he will appeal the judge’s ruling.

At the foundation’s urging, Kelley revoked Slaughter’s July 12 donation of his interest in the couple’s $1.3 million home to his wife, Shalonda Denise Slaughter. The judge also revoked Slaughter’s transfer of property — including a 2007 Mercedes-Benz, a 2009 GMC Yukon, jewelry and a share of his retirement income from the Louisiana State Employees Retirement System — to his wife that same day.

The foundation claimed in its lawsuit against Slaughter that he received $400,000 in salary supplements without foundation board approval, although the Southern Board of Supervisors authorized the payments as the result of a 2007 settlement of a Slaughter lawsuit against Southern. The foundation’s board of directors never approved the salary supplement payments, foundation attorneys argue, and the foundation was not a party to Slaughter’s employment contract.

Kelley, in rulings July 31 and Aug. 13, ordered Slaughter to repay a combined $475,000 to the foundation. That money included $400,000 in combined salary supplements for the years 2007, 2008 and 2009, plus $75,000 in foundation money that Slaughter used to pay a lawyer after he sued Southern over his dismissal.

The Slaughters, who married in 2000, filed a petition Aug. 15 in Family Court to terminate their community property regime and enter into a separation of property agreement. Retired Family Court Judge Luke LaVergne approved the request Aug. 20.

Castille argued Thursday that Slaughter intended to defraud the foundation, but he said the foundation needed to prove only that Slaughter’s actions “increased his insolvency” to the detriment of his creditors.

Kelley nevertheless said the timing of Slaughter’s actions and the amount of money involved “clearly shows intent to defraud.”

Slaughter and his wife testified at the hearing and denied the allegations of fraud.

“Were you trying to defraud the foundation?” McLindon asked Slaughter.

“No sir. Absolutely not,” he replied.

“Did you have any intent to defraud creditors?” Denise Slaughter’s attorney, Nancy Sue Gregorie, asked her.

“No,” she answered.

Castille asked Slaughter if he has sufficient assets to satisfy the $475,000 judgment and the interest that will increase it to $500,000.

“I do not have $475,000 in a separate account or anything else. I do believe I have the capacity to borrow it,” said Slaughter, who noted that their $1.3 million home is mortgaged to the tune of about $775,000. His monthly retirement income is $14,000.

The Slaughters have six children. Denise Slaughter is his second wife. Ralph Slaughter has three grown children from his first marriage that ended in divorce.

Denise Slaughter testified that she had pressed her husband for several years to enter into a post-marriage agreement to protect her children.

Also Thursday, Kelley said he will hold a future hearing to determine whether Denise Slaughter should be held in contempt for being “less than candid to the court” earlier this month. Thursday’s hearing was the continuation of a hearing that began June 12. Denise Slaughter showed up at that hearing without an attorney and asked for a delay, saying the lawyer she expected to hire indicated he could not be in court that day.

After that hearing, Ralph Slaughter indicated to reporters that his wife was considering a number of lawyers. Kelley said Thursday that he saw those comments on television and was not pleased.

Slaughter is suing the Southern University Board of Supervisors in state and federal courts for retaliation and wrongful termination.