After the abrupt closure of Concordia University in Portland, Oregon, in 2020, its long-term technology contractor, HotChalk, filed a $302 million lawsuit against the university and its parent organization, the Lutheran Church Missouri Synod, alleging fraud and interference.
The case, which was set for trial this week, has settled.
Late last week, the Kirkwood-based Lutheran Church Missouri Synod reached a binding settlement agreement with HotChalk, the company’s lead counsel, Jim McDermott, confirmed Sunday in an email to The Oregonian/OregonLive. The terms of the agreement are confidential, McDermott said.
Concordia and HotChalk settled late last year; Multnomah County Circuit Court entered a judgment of about $300 million against Concordia in favor of HotChalk, records show.
The Oregonian/OregonLive covered the dispute extensively in 2020. Here are five takeaways from that reporting.
1. Concordia had a high-stakes contract with HotChalk
Concordia’s future was tied to a business relationship with HotChalk, an education tech firm hired to expand its online programs. This deal, however, became a factor in the university’s financial collapse, reporting from The Oregonian/OregonLive showed, because it was dependent on “overly aggressive enrollment targets” that were not met.
As enrollment declined, the terms of the deal became increasingly unfavorable for Concordia, with HotChalk’s share of revenue growing to exceed 50% by 2019. The university appeared trapped, facing a potential liquidation liability to HotChalk of as much as $400 million, according to a 2018 internal analysis. This relationship drained the university’s cash reserves and led to a financial crisis that no lender would help solve.
2. HotChalk alleged fraud in its $302 million lawsuit
California-based HotChalk sued Concordia and its parent, the Lutheran Church Missouri Synod, for $302 million, claiming it was defrauded. The lawsuit alleged that Concordia, despite a 20-year contract with HotChalk to help provide online education programs through the university, was secretly pushed to close, leaving HotChalk with significant financial losses.
3. Ideological conflict over LGBTQ rights was a factor in the university’s financial collapse
While financial instability was the public reason for Concordia’s closure, documents revealed that a years-long, escalating conflict with its parent organization, the Lutheran Church Missouri Synod, over LGBTQ inclusion was a driver of the school’s demise. The national church leadership repeatedly condemned the Portland campus for its tolerance, particularly its Gay-Straight Alliance club, accusing the university of “publicly endorsing teaching and behavior that endangers human souls.”
4. Valuable assets were transferred just before closure
HotChalk claimed that on the same day the Concordia board voted to shut down, the synod recorded new property deeds giving it security interest in the university’s valuable land in Northeast Portland. This allegedly fraudulent transfer secured the synod’s assets at the expense of other creditors like HotChalk.
5. HotChalk argued Concordia’s closure was not inevitable
Despite Concordia’s deep financial trouble, HotChalk alleged the university could have survived with its estimated $100 million in 2020 revenue. The firm claimed it pleaded with Concordia’s leadership to cut costs, such as the athletic program, to remain viable.
This story was drafted with the assistance of generative AI based on original reporting from The Oregonian/OregonLive and edited by Oregonian editorial staff.
©2025 Advance Local Media LLC. Visit oregonlive.com. Distributed by Tribune Content Agency, LLC.
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