Not much of a surprise here.
When you have a signed memorandum of understanding, but an unsigned contract, there is plenty of room for disagreement. And if you throw in the amount of money that Billy Gillespie would have received under the contract, versus what he was deemed by the school to be owed under the memorandum of understanding, Gillespie had plenty of incentive to file a lawsuit.
It's interesting that he filed the lawsuit in Texas. Doubt a jury in the Bluegrass State would have felt too sympathetic for Gillespie's arguments. There will be all sorts of legal maneuvers over the location in which the case should be heard.
I think Gillespie should have just signed his contract. He didn't, so he bears at least some of the responsibility for his predicament. He still probably would have been fired, but at least there wouldn't be much of an argument about his separation package.
I'm thinking the University of Kentucky will settle, somewhere close to the amount that Gillespie would have gotten if the contract had been signed.