The Tribune

• Aiming for construction start ‘in three months’
• Otherwise campus faces 2025 ‘breaking point’
• Co-founder legal battle to have ‘zero impact’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Grand Bahama medical school says its imminent $25m expansion will create 200 construction jobs as it dismissed a legal battle with its co-founder as “a distraction”.

William Colgan, chair of Western Atlantic University School of Medicine’s board of directors, told Tribune Business it hopes building work will start “in the next three months” once all necessary Grand Bahama Port Authority (GBPA) approvals are received given that ever-increasing student enrollment will soon leave the existing campus “at breaking point”.

With the second phase expansion targeted for completion by September 2025, he added that the school’s presence is already having a significant impact on Freeport’s economy with average annual per capita spending by students and faculty members standing at between $25,000-$28,000 and $35,000-$40,000, respectively.

Mr Colgan, meanwhile, told this newspaper that the school’s recently-launched litigation against Peter Goetz, also its former chief executive, will have “zero effect” and “truly no impact” on the school’s operations and management as separate cases proceed through Delaware’s federal and chancery courts.

The companies responsible for Western Atlantic’s operations and development, in a federal court lawsuit unveiled on February 13, 2024, are alleging that Mr Goetz “fraudulently offered and sold investments” in the school to “key high level employees” - including faculty members - via his RJG Global Education vehicle.

They claim Mr Goetz offered these employees indirect equity ownership interests in Western Atlantic by soliciting them to buy into RJG, which itself owned stakes in the development and operating companies, without their knowledge. As a result, they do not know how many shareholders the medical school may actually have because they did not deal with the investing employees directly,

Thus Western Atlantic’s development and operating entities are alleging that their co-founder’s actions have endangered the relationship with employees vital to its “continuing growth and success”, forcing them to take action to “prevent further harm to their businesses, reputation” and key staff. They claim they have suffered “direct financial damage... of no less than $3m”.

Mr Goetz declined to comment when contacted by Tribune Business, responding to its inquiries via What’s App message: “As per our policy, RJG Global Education does not comment on any potential or ongoing legal proceedings.”

However, his attorneys have entered a ‘notice of appearance’ in the Delaware federal court case, thereby indicating that he and his RJG Global Education company dispute and reject the allegations made against them and intend to defend the action. Mr Goetz has also initiated separate legal action against Western Atlantic in Delaware’s chancery court over legal fees related to their battle.

Mr Colgan, though, told Tribune Business that the medical school’s development and operating companies had been left with no choice but to launch the federal court action in a bid to protect the interests of staff and faculty who had invested through Mr Goetz and RJG. He added that Western Atlantic is seeking a court order to ensure those persons “obtain the same benefit [as] all other investors”.

“It has zero effect,” Mr Colgan said of the legal dispute. “He’s [Mr Goetz] been gone from the school since the end of last year. It truly has no impact on the school.” Describing the courtroom fight as a sideshow, he signalled that plans are well advanced for the second phase expansion of the Freeport campus.

Confirming that 165 students are presently on campus, Mr Colgan said Western Atlantic had targeted higher enrollment. “We had anticipated more students,” he conceded. “There are a number of contributing factors but, by and large, for a new medical school that’s had two years of operations, that 165 students truly, by anybody’s standards, would be viewed as a success.

“It was always contemplated that we would have three phases to build the medical school. The first phase has the ability to accommodate 250 students on campus.... We have designed building phase two, including the architectural and engineering plans. They are complete. They are in at the Port [Authority].

“We anticipate the school will need to expand its growth by September 2025. We’ll be at our breaking point, and will need to expand our capacity. We have the capacity to educate 250 students in the current structure,” Mr Colgan confirmed.

“Our plans are fully developed, they’re in at the Port Authority for permitting, and we’re getting ready to build the second phase of the medical school. We’re hoping in the next three months to begin construction. Phase two of the medical school is approximately a $20m-$25m construction project, and we anticipate similar numbers to phase one, creating about 200 construction jobs.”

Asked how much of an economic impact the school is making, Mr Colgan replied: “We actually have some scientific data, and the average student contributes $25,000 to $28,000 a year to the local economy and the average faculty member contributes $35,000-$40,000 in economic benefits to the community.

“For a new medical school, the goal is typically between 50-75 students a year, which would put us between 100 and 150. We were 165 students in the first year of operation. We were a bit more optimistic in what we could accomplish.”

The Western Atlantic Board chair, in an earlier statement issued in response to Tribune Business inquiries on the legal battle with Mr Goetz, said: “Western Atlantic University School of Medicine (WAUSM) is committed to full transparency and the obligation to protect every individual investor that has placed their confidence in the medical school.

“In November 2023, the governing Board requested and received Peter Goetz’s resignation and he is no longer affiliated with WAUSM. The legal proceedings against Peter Goetz and his company, RJG Global Education, was initiated by WAUSM in an effort to safeguard a small number of investors that do not have the benefit of the oversight and protection of the governing board of the medical school.

“It is WAUSM’s objective to seek a court order to have those individuals with an indirect investment obtain the same benefit of all other investors. We are fully committed to our core values and the preservation of our good name and reputation.”

Speaking to this newspaper in a subsequent interview, Mr Colgan branded the legal fight as “kind of a distraction”. He added: “I want to say it’s part of the evolution of any new start-up entity. Everything is not right from day one. We want to really focus on what we do well, and we have a stellar faculty educating students to become future doctors.

“Our focus has not changed. The Peter Goetz situation, it’s kind of a distraction. It’s not costing anyone time. It’s where Mr Goetz put individual investors into an entity he controls, and we determined it could potentially damage the medical school. It’s something we need to control sooner rather than later, and we have filed a lawsuit to address it and I’m sure we’ll get the right outcome.

“We have a good, harmonious relationship with faculty.... This is where the medical school felt the obligation to make things right for a small number of individual investors who invested through Peter Goetz and felt they were investing in the medical school,” Mr Colgan continued.

“Our feeling is those individuals deserve the same level of integration. We have 50 investors in the medical school, and we feel we have an obligation to protect investors who invested in it so they can be part of a transparent process.

“We are very concerned that individuals who felt they were investing in the medical school were investing in Peter Goetz’s vehicle and not directly. It’s literally us trying to protect people who believe in the medical school, have invested in the medical school and will make it a success for The Bahamas.”

Western Atlantic’s lawsuit alleges that Mr Goetz’s actions and activities violated both US federal and Delaware state securities laws. The legal actions have been filed in Delaware because that is where the medical school’s development and operating entities are domiciled.

Among those Mr Goetz allegedly offered ownership interests in RJG to were Dr Laura Welke, who at the time served as a dean and professor at Western Atlantic. At least 11 key employees were said to have been solicited for investments.

“Goetz fraudulently offered and sold investment interests in and through RJG, his solely-owned company, to numerous individuals, including certain key, high level employees of the medical school, claiming those interests would entitle those investors to a financial interest in the school as well as generous, risk-free returns, without ever documenting such arrangements into formal written agreements,” the lawsuit claims.

“In addition, via a purported ‘Rescission Offer’ that he sent to certain investors, Goetz effectively admitted that he fraudulently offered and sold investment interests in RJG and that his actions violated federal securities laws and, by extension, analogous provisions of Delaware law designed to protect investors....

“By offering these interests in RJG directly to some of the most important professionals at the medical school, without any notice to the other members of the organisation, Goetz improperly inserted himself and his company in-between these critical employees and the school itself.”

Western Atlantic is alleging that Mr Goetz has failed to disclose the identities of all he solicited and, as a result, “there may be more investors claiming” an ownership interest than it knows about”. It added that this has caused “great harm” to both itself and those individuals.

“It also harmed plaintiffs directly because they have been forced to take remedial action to address that conduct and prevent further harm to their businesses, reputation and key employees, as well as to suffer continuing uncertainty as to whom might claim to hold an interest in the medical school,” Western Atlantic asserted.

Sources familiar with the situation voiced shock at the claims against Mr Goetz. “Peter is a very straight fellow,” one said. “I don’t see him being the mastermind of anything like this. He’s not that type. I can’t seem him being the driver of a scheme like that. They’re all good people.”