Arguments presented in Jerry Falwell's suit for retirement benefits against LU

After months of back-and-forth filings, Jerry Falwell Jr. and his attorneys were present in federal court Tuesday morning to give their arguments as the former Liberty University president seeks about $8.6 million in retirement benefits.

On March 8, Falwell and counsel filed a federal lawsuit claiming the school he steered as president from May 2007 to August 2020 has "wrongfully denied and withheld benefits" set forth in his retirement plan, bringing the action against the university and the executive committee of the board of trustees at LU as the plan administrators for the Supplemental Executive Retirement Plan (SERP).

In 2019, Liberty and Falwell began negotiation on a new employment agreement, as the seven-year agreement signed in 2012 came to a close. The 2019 employment agreement was similar, with one key distinction being SERP.

On July 1, 2020, the account was credited with an amount of nearly $7.6 million and, each June 30, the account was credited with an investment return at the annual rate of 6%, totaling about $8.6 million as of July 1, 2022, according to the lawsuit filed in U.S. District Court in Lynchburg by Falwell on March 8.

Scott Oostdyk, arguing on behalf of LU on Tuesday, said in court the backdrop of "why we're here" is the Liberty Way, referencing Falwell's departure Aug. 25, 2020, and the events leading up to it. The Liberty Way is a code of conduct for students and staff at the Christian university Falwell's famous father, the late Jerry Falwell, launched 52 years ago.

One distinct event Oostdyk mentioned in his argument was the accusations that Falwell's wife, Becki Falwell, had an affair with Giancarlo Granda — an estranged business partner of Jerry Falwell Jr.. The accusations were at the center of the 2022 Hulu documentary "God Forbid."

Oostdyk argued Falwell kept LU in the dark about the growing turmoil from the affair, consistent with Liberty's April 4 filing in response to the federal lawsuit.

According to an April 4 filing from the university, Granda and Becki Falwell's relationship began fracturing around 2014, leading to Granda "building currency" such as storing of text messages and photos.

LU alleges in a state court case against Falwell that the sexual relationship and business dealings between Becki Falwell and Granda began as an immoral "frolic."

LU also claims in the filing that Falwell suppressed the fact that he had enabled sexual relations between his wife and Granda and also facilitated and shielding the "adulterous conduct," taking leave of "the good judgment expected of the leader."

Falwell responded June 30, 2020, through text message refusing to "endure any further extortion" and this communication took place nearly a month previous to when Falwell negotiated the July 22, 2020, SERP and Rabbi Trust from Liberty, the filing states.

Also referencing the 2022 Hulu documentary and news coverage, which Oostdyk described in court as the "Kamikaze" route, he further said the situation put Liberty "at risk" and is "inconsistent with the Liberty Way."

LU is currently arguing these facts in a state court case, which Oostdyk argues is parallel to the current federal case in which Falwell is seeking benefits.

"I would say there's a complete parallel between this and the state case," he said.

A decision was not announced Tuesday, as the judge will issue a written opinion at a later date.