Written by: Michael T. Nietzel
Published by: Forbes

MBA News Digest Comment: None.

Extracted Content: Declaring financial exigency is a doomsday scenario to be used only by institutions facing such imminent and severe financial circumstances that the survival of the institution as a whole is threatened. The American Association of University Professors (AAUP) has a policy, followed by most colleges, that tenured faculty members, the most valuable asset of any college, cannot be terminated as a way to lessen financial problems under any circumstances other than a declaration of exigency. But institutions are very hesitant to declare it, even when they are in extremely dire straits, because of the downward spiral of bad publicity, negative scrutiny by financial institutions, and a general loss of confidence in the school that inevitably ensues.