The Associated Press
Morris Brown College officials believe they would be able to sell off some property, settle mounting debt and keep most of the campus intact under a $20 million plan submitted to a bankruptcy court.
The Atlanta Journal-Constitution reports (http://bit.ly/10wJVD8) that court papers filed Friday outline the proposed deal, which comes less than a month after college trustees turned down an offer of nearly $10 million in taxpayer money. Atlanta Mayor Kasim Reed had offered the money to try and eliminate the school’s debt and has expressed skepticism toward the school’s plan.
“If they believe they have a better path, we support the path they think is in their best interest,” he told the newspaper. “But we continue to believe that the package the city put forth, which would have eliminated their debt, given them a smaller footprint, given them a chance to repurchase their assets and assured the city’s support in securing their accreditation, was the better alternative.”
The school is about $35 million in debt and has no steady cash flow. The bankruptcy deal calls for leasing out certain school property — such as Herndon Stadium, which was built for the 1996 Olympics.
William “Sonny” Walker, vice chairman of the school’s board of trustees, said he has been directed by the trustees not to elaborate on the most recent deal. It involves money from FD LLC. Part of FD’s holdings is in Family Dollar, a Charlotte, N.C.-based chain of discount stores.
“I feel very good about how we are moving,” Walker told the newspaper.
Philadelphia-based attorney Anne Aaronson has served as an unofficial school spokeswoman and says the proposal “means that Morris Brown will be able to get accredited and survive.”
The deal must be approved in court and a hearing is set for early August. There, school officials will have an opportunity to defend the deal and allow creditors to vote on the proposal.
The school was founded in 1881 by the African Methodist Episcopal Church and has seriously struggled in recent years. The college once enrolled 3,000 students and now enrolls only 35. A former president and former financial aid director have both pleaded guilty to embezzling federal student aid money and using it to try paying the school’s operating expenses.
Information from: The Atlanta Journal-Constitution, http://www.ajc.com
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