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To: Board of Trustees

From: John Engler, Pres

Date: December 3,2018

Re: Settlement

Earlier than we expected, the last piece of the Settlement puzzle fell
into place late on November 21,2018, when a california court entered
last order we were waiting on. Entry of that order triggered our obligation
pay $425 million into the Survivor's settlement fund and $75 million into our
Litig"tion Fund. We anticipate making the payment on December 4.
Consistent with the Board's position that the Healing Fund would
used as a bridge transition to a global settlement, this earlier than
court action on the settlement permits us to use the $8.6 million remaining
balance in the Healing Fund to reduce the amount of our borrowing to
Office of the the setilement. The effect of this is to reduce our net borrowing from $500
President million to $492 million.

Hannah Administration Building Additionally, with suspension of the Fund last July (because of the
426 Auditorium Road, Room 450
East Lansing, Ml 48824 massive fraud discovered), the earlier than expected settlement resolution
also obviated the need to hire a new fund administrator to run a new
Fayc 517-355-4670 temporary fund. (We will resolve any reimbursement claims made before puoiicty suspended the Fund in July.) We now have greatly expanded on
b"tprt mental health services, including counseling and sexual assault
services, to help members of our MSU Community:
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Finally, we will use any recovery from the Healing Fund fraud and any
recovery from our insurers to pay off the bonds used to pay the settlement'

MSU is an affirmative-action,
equal-opportunitY emPloYer