Penn State scandal: 'Good faith' settlement negotiations begin

Settlement negotiation have begun between Penn State and the 20-25 men who have accused former Nittany Lion defensive coordinator Jerry Sandusky of sexual abuse. According to attorneys for the school, negotiations are proceeding in "good faith," and the Board of Trustees has approved a resolution for a legal subcommittee to approve possible settlements, as well as the authority to set "dollar limits."

The most recent meeting of the Board of Trustees was called specifically to address settlement issues. While the board granted the legal subcommittee authority to set dollar limits, an amount for such limits has not been discussed. Five of the accusers have current legal action pending against the University, while the others have come forward through counsel.

Michael Feinberg, an attorney working for Penn State, expressed optimism that settlements could still be wrapped up by January 1, though acknowledged that it will take "whatever time it takes to get it done." An alumni watchdog group, Penn Staters for Responsible Stewardship, has asked the Trustees to wait for the criminal cases against former school officials Tim Curley and Gary Schultz to play out before agreeing to a settlement.

In anticipation of costly settlements in the wake of the Sandusky scandal, both Moody's and Standard and Poor's have downgraded the long term credit rating of the institution. Penn State insists that it does not plan to issue debt to pay for the settlements.

Sandusky, 68, was transferred to state prison earlier this week, and is serving a sentence of at least 30 years following his conviction on 45 counts of sexual abuse.