UNC hired a law firm to explore leaving the ACC. Now it’s being sued for keeping it quiet
For more than two years, the University of North Carolina has discreetly funneled more than $600,000 toward legal fees related to an internal initiative called the “Carolina Blue matter,” a covert project that centers on UNC’s exploration of conference realignment amid the financial inequity of the ACC compared to the SEC and Big Ten, as first reported by The Athletic earlier this month.
Now, local attorney David McKenzie is suing UNC once again over its opaque billing practices and refusal to release full records of its transactions with the law firm, Skadden, Arps, Slate, Meagher & Flom LLP.
“Defendants have failed to produce complete, itemized Skadden billing records, instead providing misleading invoices that obscure the services rendered,” McKenzie wrote in the lawsuit, which was filed Wednesday in Orange County Superior Court.
UNC enlisted Skadden in 2022 to “be available to provide advice on counseling… regarding commercial issues involving athletics.” However, details of their work were deliberately obscured in a way that violates state law, argues McKenzie.
Documents obtained by The News & Observer indicate UNC used a highly controlled process to approve Skadden’s invoices, allowing only a small circle of insiders access to full records. Specifically, it appears the university leveraged Relativity — a database management system — to review detailed legal invoices.
Instead of receiving itemized bills via email, Charles Marshall (the former UNC vice chancellor and general counsel) or another university official would log into the database to review expenses, McKenzie theorizes. Once approved, it appears Skadden generated a simplified “one-pager” version of the invoice, stripped of its details. This sanitized summary was processed for payment and was the only version made available for public records requests, according to documents obtained by The N&O.
Emails obtained by The N&O show this process was carefully structured:
▪ A May 31, 2024, email from Mark D. Campana, senior legal assistant specialist at Skadden, asked if Marshall could look at an April 2024 invoice and “provide sign off so that we can generate the one-pager.”
▪ A July 17, 2024, email addressed to Campana from Laura H. Thornton, a program specialist in UNC faculty affairs, said, “the invoices are approved and you may send the one-pagers for everything except the last invoice for July.”
▪ A Feb. 23, 2024, email from Thornton to Campana said, “Charles has reviewed the invoices and you may send the one-pages to my attention.”
McKenzie argues in his lawsuit that UNC’s use of one-pagers suggests an intentional effort to withhold complete billing records from public scrutiny. He asserts the university does possess detailed invoices but refuses to disclose them, which would violate North Carolina’s public records laws.
His lawsuit seeks to illuminate what Skadden was actually hired to do.
McKenzie vs. UNC
McKenzie previously filed a lawsuit against the University of North Carolina after the UNC Board of Trustees planned to discuss athletics matters in a closed session last May. McKenzie, who specializes in intellectual property law, became concerned upon seeing a report about the proposed closed session. He filed a complaint in Orange County Superior Court, accusing the board of violating the state’s open meetings laws.
McKenzie’s legal action led to a temporary restraining order from Judge Alyson Grine on May 16, which prohibited the board from discussing in closed session “UNC Athletics’ financials, budgeting, deficit, or ongoing or future conference alignment and related strategic planning.”
“It was moments before they were moving to go into closed session where Judge Grine in Orange County took our call,” McKenzie told The N&O in July. “We had a temporary restraining order hearing on the phone.”
The parties reached a settlement on July 19, under which UNC agreed to pay McKenzie $25,000 to cover attorney’s fees and other claims. In exchange, McKenzie dismissed the lawsuit with prejudice, meaning it cannot be refiled.
UNC Board of Trustees Chair John Preyer publicly committed in September to adhering to North Carolina’s open meetings law — a key stipulation of the now-settled lawsuit.
Struggles with governance, transparency
McKenzie is not the only person to check the board’s power over the past year.
In January, UNC System President Peter Hans temporarily reduced the board’s powers over athletic programs with the goal of preventing overreach. The trustees’ ability to approve coaching hires and athletic contracts was restricted, with Hans‘ approval now required for these actions.
This action followed concerns about trustees, particularly Preyer, taking unilateral steps in areas like hiring and negotiating with athletic department employees.
Hans, for example, expressed concerns about “independent and unilateral actions” regarding athletics by some trustees, which he said “continue to create substantial legal risk to the university.”
It also came after the controversial hiring of Bill Belichick as UNC football coach, which some trustees were accused of influencing outside the formal process, according to The Athletic. Some trustees, meanwhile, remain critical of the athletics department’s management and are pushing for more transparency.
The bigger picture
The discussion about UNC’s potential exit from the ACC has been ongoing, especially given the financial disparity between the ACC’s TV revenue and those of the Big Ten and SEC.
Internal messages previously obtained by The N&O suggest UNC officials, including athletic director Bubba Cunningham and former chancellor Kevin Guskiewicz, have considered partnerships with other conferences. Cunningham’s June 2022 message to Guskiewicz asked: “Do we want to maintain all teams in the ACC? Is this a new league? Do we want to have the same number of teams at each school?”
While UNC has publicly downplayed its realignment strategy, it appears the university is doing its due diligence to evaluate a constantly shifting landscape. McKenzie’s lawsuit could force the university to disclose key details about its strategy, its legal expenditures and the true extent of its preparations to leave the ACC.
This story was originally published February 19, 2025 at 4:09 PM.