wfn.org | Aamodt, Augsburg Fortress Sue

[ELCANEWS@ELCASCO.ELCA.ORG]

ELCA NEWS SERVICE

August 9, 1996

AAMODT, AUGSBURG FORTRESS SUE (101 lines)
96-19-056-AH

     CHICAGO (ELCA) -- A suit was filed July 30 between Augsburg
Fortress Publishers, the publishing house of the Evangelical
Lutheran Church in America, and Gary J.N. Aamodt, former
president of Augsburg Fortress, in Minnesota's Hennepin County
District Court.
     Augsburg Fortress hired Aamodt in 1992 as president and CEO
and asked him to resign at a board meeting in Toronto in April
1995.  The publishing house alleges that Aamodt took excessive
compensation without obtaining authorization from the Board of
the Publishing House and breached a duty of loyalty by failing to
disclose his actions to the board.
     The Rev. H. George Anderson, presiding bishop of the ELCA,
expressed "confidence" in the Board of the Publishing House and
supports "its efforts to resolve this unfortunate dispute."
     According to Augsburg Fortress attorneys Aamodt commenced
the suit against the publishing house Sept. 28, 1995, and
Augsburg Fortress served a counterclaim upon Aamodt.  The filing
of papers with the court in Minneapolis made the lawsuit a matter
of public record.
     Specifically the Augsburg Fortress counterclaim alleges that
Aamodt improperly received ownership of a deferred annuity to
supplement his retirement benefits and, without approval of the
board, arranged to have the resulting personal tax obligations
paid by Augsburg Fortress.
     Aamodt charges the publishing house with breach of contract,
fraud, defamation and causing emotional distress.  Augsburg
Fortress has denied Aamodt's allegations, according to attorneys.

Each party is asking for financial damages.  Aamodt has asked for
jury trial.
     The Rev. David L. Tiede, St. Paul, Minn., chaired the Board
of the Publishing House in 1995 and asked for Aamodt's
resignation.  Tiede praised the ELCA for providing him with
"extremely competent assistance, helping the board act
responsibly."  He said, "As soon as any irregularity was
suggested we undertook an audit and sought legal counsel.  The
executive committee had two months to research the situation
before the board met."  Tiede is the president of Luther
Seminary, St. Paul.
     Tiede stressed the responsibility of the board and the
success of the church's systems.
"Church leaders supplied what the board needed to make sound
decisions.  The board discharged its duty with insight, courage
and responsibility."
     Tiede said, "The church is full of volunteer boards that do
not expect to be faced with such a serious problem.  What is
remarkable is that, when it happened the church's fail-safe
systems worked.  The Office of the Bishop went right to work and
found the professional counsel we needed.  The full board
received full disclosure of the process."
     Anderson said Tiede and the board, "by their efforts to
discover and remedy problems existing at Augsburg Fortress, have
exercised their appropriate role as directors.  I am grateful to
them for their diligence and their prompt response, and
especially to Dr. Tiede for his leadership.  Their decisiveness
has restored confidence in our publishing enterprise."
     Augsburg Fortress contends that Aamodt directed the
publishing house to buy a Lutheran Brotherhood annuity in
Aamodt's name and pay the first year premium of $234,027.  He
also allegedly had the company pay a tax bill of $200,160 that
resulted from his ownership of the annuity.  The counterclaim
alleges Ausgburg Fortress also paid $129,634 to obtain a $300,000
life insurance policy for Aamodt and an additional $110,874 for
taxes.  According to Augsburg Fortress, leasing a Mercedes for
Aamodt amounted to a $3,515 expenditure.
     In all, Augsburg Fortress says Aamodt received $826,665 in
1993.  Of that amount the board did not authorize payments of
$548,576, according to the counterclaim.
     In an interview Aamodt said, "I had a contract with Augsburg
Fortress and I guess this is about promises made and promises not
kept, an awful lot of bumbling on the part of the board, a secret
process about which I knew nothing and an ambush in Toronto.
And charges against me that are not true."
     Aamodt said he was "presented with a way for the
organization to fulfill the supplemental retirement benefits."
He said, "I was presented with a plan, an annuity for retirement"
and told "we could look at it again about eight years out and see
what we thought."
     Aamodt said, "I take very seriously my position of trust
within the church.  Obviously I've been cut off from all sorts of
natural contacts.  This came as a terrible blow to me, it took
away what I regarded as a vocational commitment, one that
combines my love for the church with my love for publishing.
It's been a tough year."
     According to the Rev. Marvin L. Roloff,  Augsburg Fortress
president, "Augsburg Fortress has always been open to resolution
and continutes to be open to resolution of these disputes prior
to trial.  We move into this confidently because we feel the
leadership reflected by this church was responsible leadership
all the way through the board and chair and management."
     The next step will be the process of discovery in which
sworn testimony will be taken and documents exchanged between
parties, attorneys said.

For information contact: Ann Hafften, Dir., ELCA News Service,
(312) 380-2958; Frank Imhoff, Assoc. Dir., (312) 380-2955