On Saturday, Morris Brown College voluntarily filed for chapter 11 bankruptcy protection in Atlanta, Georgia. ?According to court filings, the college was founded in 1881 and its beginning marked ?the?opening of the first educational institution in Georgia under sole African-American patronage.? ?However, in 2002, the college was denied accreditation membership ?after over seven decades of continued?accreditation from the Commission on Colleges of the Southern Association of Colleges and?Schools.? ?The loss of accreditation meant that Morris Brown College did not qualify for federal funding and its students were ineligible for financial aid.
For the past year, according to bankruptcy court documents, Morris Brown has been in discussions with?Transnational Association of Christian Colleges and Schools to obtain accreditation and ?has met the vast majority of the requirements?for that accreditation.? ?However, it has failed to demonstrate financial stability, which is a prerequisite for accreditation. ?The college filed for chapter 11 protection because it ?determined that reorganizing its affairs in Chapter 11 is the most efficient and expeditious?manner in which to resolve its remaining financial issues.? ?Morris Brown?s president,?Dr. Stanley Pritchett, stated in a declaration filed with the court that ?Morris Brown College anticipates that upon reorganization of its financial?condition, it could achieve candidacy leading to full accreditation through TRACS within six to?twelve months of its emergence from Chapter 11.?
In the same declaration, Dr. Pritchett also identified the key challenges currently facing the college:
The most daunting challenges faced by Morris Brown College at this time are: its?excessive long-term bond debt that needs to be restructured or otherwise resolved; its lack of?federal financial aid for student support and, in turn, increased revenues to the College; and its?need to establish a sound investment program to encourage philanthropic giving and charitable?donations from its supporters to sustain the College into the future.
As such, the college intends to attempt to use the bankruptcy process to achieve certain goals:
[Morris Brown College] seeks in the Chapter 11 process to achieve the following?outcomes: (1) relief from and resolution of outstanding bond and other significant creditor?obligations, (2) financial stability sufficient to meet the requirements of TRACS and obtain?accreditation, and (3) a court-approved plan with these elements that will attract donor support.
The college?s chapter 11 petition lists assets of between $10 and $50 million. ?Liabilities within the same range are listed as being owed to between 200 and 1,000 creditors. ?Morris Brown College is represented in the bankruptcy case by the law firms of Dilworth Paxson LLP and?The Moore Law Group, LLC.
For more on the bankruptcy filing, read two of the key documents filed with the bankruptcy court, available for free on our blog:
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