Indiana Online University Sues Education Platform Over Stagnant Ethiopia Project

Indiana Wesleyan University lent $1.7 million to Ole Holdings to launch an online education project that would expand IWU’s online offerings into multiple universities in Ethiopia using Ole’s online education platform. However, the project never launched, a fraud suit (docket 1:24-cv-00239) alleged Friday in U.S. District Court for Northern Indiana in Fort Wayne.

Ole failed to launch the project, and it has not repaid the loan, the complaint alleged.

In early 2020, IWU engaged in discussions with Ole about expanding its international online education presence, the complaint said. From January to March, the parties negotiated a proposal where IWU would provide educational services in Ethiopia through that government’s Ministry of Science & Higher Education (MoSHE), it said.

The parties entered into the Educational Services Platform Strategic Development, Licensing & Cooperation Agreement, known as the Master Cooperation Agreement (MCA) in April. Ole committed to licensing its Educational Services Platform (ESP) to IWU, which would use it to provide educational services to Ethiopian citizens for degree programs, skills training and teacher and government employee certifications, the complaint said.

Ole CEO Dalen Harrison was scheduled to visit IWU’s campus for a meeting in March 2020, but it was canceled due to COVID-19, the complaint said. Two years later, Harrison met with IWU in Indianapolis to discuss the project, it said. The MCA operated on the condition that MoSHE and Ole would execute an agreement where the Ethiopian government would release funds to pay for the use of the ESP in that country and provide scholarships and support for IWU’s educational services, it said.

The total licensing fee for the ESP would be $5 million, with IWU paying Ole $500,000 in two payments of $250,000; the remaining $4.5 million would be paid through joint fundraising, on the condition that Ole secured a partnership with MoSHE, alleged the complaint.

In addition to the two $250,000 payments IWU made on May 19, 2020, and June 18, 2020, to satisfy the initial investment, IWU provided Ole money “in multiple draws” to support Ole’s negotiations with the Ethiopian government and to develop the ESP pursuant to the MCA, known as “the bridge loan,” said the complaint. Ole borrowed $1.68 million from IWU under the bridge loan in 13 separate draws, it said. Ole agreed to repay each by a certain date; IWU extended the due date for the bridge loan “several times,” it alleged.

On Feb. 3, 2022, Harrison said Ole would begin repayment of the bridge loan upon execution of the agreement with MoSHE, but that agreement hasn't been signed, said the complaint. Ole owes the entire outstanding balance under the bridge loan -- $1.68 million --- but has made no payment.

IWU alleges breach of contract and unjust enrichment. It requests a declaratory judgment in its favor for $1.68 million plus pre- and post-judgment interest. It also requests judgment discharging it of obligations under the MCA and a judicial determination that it’s not liable for unpaid licensing fees under the agreement.