Oberlin College pays $36 million to Ohio bakery after its owner accused the school of refusing to pay penalty in defamation suit

• A 2016 shoplifting incident led to a campus-wide outcry against a local bakery.
• Gibson's Bakery won a defamation lawsuit against Oberlin College in 2019, but claimed the school wouldn't pay in September 2022. 
• An attorney for the Gibsons told Insider the family has since received the funds.

Payday finally arrived for an Ohio bakery three years after the family-owned business won its defamation lawsuit against Oberlin College.

The Ohio Supreme Court decided in a 4-3 vote in September not to hear Oberlin College's appeal of the $36 million ruling, offering no further comment. The original 2019 ruling, which found that the college defamed the owners of Gibson's Bakery following a shoplifting incident in 2016, was upheld by the Ohio Ninth District Court of Appeals in April.

In an op-ed published in September, Lorna Gibson defended her husband, now deceased, and her son Allyn, saying she "(hasn't) seen a penny from the school" since the 2019 verdict.

"But even with this most recent ruling, the college, which has about a billion dollars' worth of assets at its disposal, still refuses to pay," Lorna wrote.

The Gibsons sued Oberlin for defamation and were awarded $44 million, but the amount was eventually reduced to around $36 million including attorneys' fees and interest, according to local Cleveland news.

An attorney on the Gibsons' legal team told Insider that Oberlin has since delivered the money.

"We can confirm that all funds have been distributed and that the family is continuing with the process of rebuilding Gibson's Bakery for the next generations," attorney Brandon McHugh told Insider.

Although the family hoped this would blow over after the 2016 class graduated, Lorna says incoming freshmen "have been brainwashed to hate" Gibson's Bakery, and the business is still suffering.

The bakery's then-owner David Gibson and his family were accused of racism after his son tackled a Black male student suspected of shoplifting bottles of wine. The confrontation also involved two more Black students who tried to intervene. The incident sparked furious protests across campus as students and faculty called out the Gibson family for discrimination. 

The students eventually pleaded guilty, but not before flyers condemning the bakery were passed out around campus and Oberlin officials told campus food providers to stop buying items from the Gibsons, according to CBS News.

McHugh says the family is ready to move on from the ordeal.

"The family is relieved that the legal fight is over and that their reputation has been vindicated," McHugh told Insider on the Gibsons' behalf.

He added: "At this time, there has not been a rekindling of the previous business relationship with Oberlin College. However, Lorna is willing to welcome Oberlin College back."