The university’s lawsuit alleges Falwell was dishonest with the executive committee when negotiating an exceptionally generous severance package, when he knew a brewing sex scandal would likely force him out at some point. The lawsuit also claims Falwell breached his fiduciary duty as the university’s president and member of the board of trustees and engaged in a statutory conspiracy to hide an alleged plan to extort Falwell from the university.
Liberty is seeking more than $40 million in compensatory and punitive damages “plus any other damages provable at trial,” according to the lawsuit.
The suit was filed Thursday in a Lynchburg, Virginia, state court.
Liberty University spokesperson Scott Lamb has declined to comment further on the current lawsuit.
CNN reached out to Falwell and an attorney who’s represented him on other legal matters but has not heard back yet.
Liberty University’s lawsuit says Falwell acted against the “spirit” of the university in multiple instances and his alleged scandalous dealings ultimately hurt the school and its reputation. The school is known for its openly conservative policies that require students to refrain from “immodest behavior” and drinking alcohol, according the lawsuit.
Falwell acknowledged their affair in a statement at the time, saying, “Becki had an inappropriate personal relationship with this person, something in which I was not involved.” He said he had reconciled with his wife and sought professional help. Falwell had also said in his statement that Granda had tried to blackmail him and his wife, a charge that Granda denied.
The university’s lawsuit claims that instead of divulging Granda’s alleged attempts at extortion to the university, Falwell “led a scheme to cover up the illicit conduct.”
“Falwell Jr. wanted Liberty to pay severance and retirement benefits to him if Granda revealed the Granda Allegations, and Falwell Jr. thus knowingly withheld from Liberty material information that would have altered the nature of the negotiations of the 2019 Employment Agreement,” the lawsuit says.
The allegations by Granda were the latest controversy that precipitated a dramatic fall from grace for one of the country’s most prominent evangelicals.
In a radio interview soon afterward, Falwell had said the woman was his wife’s assistant and they were at a costume party. He said the incident “was just in good fun,” but added he should never have posted the photo.
Lawsuit claims Falwell wanted an ‘escape hatch’
Falwell, a staunch supporter of former President Donald Trump, wanted an “escape hatch” for any political and personal fallout when negotiating the employment deal in 2019, according to the lawsuit.
“Falwell Jr. sought from the Executive Committee to provide him with a safety valve to protect him from such actions as having raised his profile in 2016 by being the first major evangelical leader to personally endorse Donald Trump for President. Falwell Jr. claimed that he wanted an escape hatch for political and personal fallout,” the lawsuit says.
His son raised the school’s profile — and finances — considerably as president.
CNN’s Daniel Burke contributed to this report.