Tax records may help Gillispie

ctruman@herald-leader.comJuly 3, 2009 

Everyone agrees that Billy Gillispie coached the University of Kentucky's basketball team. That much is fact. But who was his employer: UK or the UK Athletics Association?

Millions of dollars could hinge on the answer.

UK has been adamant that Gillispie worked for the university, not the athletics association, the non-profit organization that oversees UK athletics, as Gillispie claimed in a federal lawsuit filed in Texas that alleges breach of contract.

"It is unfortunate that Mr. Gillispie has sued the UK Athletics Association, a nonprofit supporting foundation that was not his employer," the university said in a news release on May 28.

However, tax returns filed by the UK Athletics Association tell a different story, listing Gillispie as the organization's highest-paid employee. The 2007 return lists Gillispie's salary as more than $1,220,667 million, with contributions to employee benefit plans and deferred compensation of $293,524.

Football coach Rich Brooks is listed as the second-highest-paid employee, at $903,731. In previous years, Gillispie's predecessor, Tubby Smith, was listed as the organization's highest-paid worker.

Failure to give accurate information in such filings with the Internal Revenue Service could risk the organization's tax-exempt status.

"The hypocrisy of the university's position is absolutely mind-blowing," said Demetrios Anaipakos, Gillispie's attorney in Houston. Either the athletics association or the university isn't telling the truth, he said.

In the federal court case, which alleges that the athletics association owes Gillispie $6 million for firing him two years into a seven-year agreement, UK President Lee Todd filed a statement saying, "There was no signed writing between Billy Gillispie and UKAA, and no oral offer or transaction to which UKAA was a party."

The university's response to Gillispie's lawsuit says that the athletics association "was never contemplated to be a party to the anticipated multi-year employment contract."

UK spokesman Jimmy Stanton, contacted this week, said, "I have been advised by counsel that this is an issue in litigation and therefore cannot be discussed publicly."

Anaipakos said the university's contention that Gillispie was not an employee of the athletics association "is really part of a sophisticated shell game."

Who employed Gillispie is a crucial legal point.

If Gillispie worked for UK, the scope of his lawsuit is limited to breach of contract and must be heard in Kentucky's Franklin Circuit Court. If he worked for the athletics association, as Gillispie's attorney argues, he worked for a private corporation that can claim no rights to sovereign immunity, allowing Gillispie to broaden the scope of his lawsuit.

Sovereign immunity is the legal theory that a government is composed of the people, who cannot sue themselves for damages.

If Gillispie was an employee of UK, which is a state agency, the university's liability would probably be limited, said Paul Salamanca, a professor at UK's college of law.

Once a judge rules on who employed Gillispie, the central issue in his lawsuit — filed in May in U.S. District Court for the Northern District of Texas in Dallas — is whether a memorandum of understanding that Gillispie and UK Athletics Director Mitch Barnhart signed holds the same legal weight as a contract.

University officials contend that the memorandum was a temporary year-to-year agreement because Gillispie repeatedly balked at signing various versions of a formal contract.

Reach Cheryl Truman at (859)231-3202.

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