Historic Black College Files for Bankruptcy to Avoid Foreclosure
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Historic Black College Files for Bankruptcy to Avoid Foreclosure

September 18, 2012

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Morris Brown College, a historic black university in Atlanta, Georgia, is filing for Chapter 11 bankruptcy in order to prevent foreclosure, according to a report from the Atlanta Journal-Constitution.

Sources say that 131-year-old college is more than $30 million in debt, and was facing a potential foreclosure in late September when creditors threatened to sell the school at a bankruptcy auction.

By filing for Chapter 11 protection, the college will at least temporarily delay the foreclosure proceeding, and give itself more time to restructure its mounting debts.

According to sources, the foreclosure action was prompted by a decision by investors to call back $13 million worth of bonds that were issued by the Fulton County Development Authority in 1996.

When it originally issued the bonds, Morris Brown tied several buildings and other piece of school property to the bonds as security. These buildings included the school's primary administrative offices.

By filing for bankruptcy, Morris Brown reportedly believes that the planned sheriff’s sale will not happen, according to the school's bankruptcy lawyer. And, during its bankruptcy filing, the school believes that it will have enough capital to keep classes in session.

According to the president of the school, Stanley Pritchett, "Morris Brown College is not going anywhere" and will not "allow this latest challenge to get in the way of what we are trying to do."

In solidarity with their school's decision, hundreds of alumni and other supporters gathered this Saturday for a large prayer gathering. The gathering turned into an impromptu church service, with attendees singing hymns and offering several prayers.

The school's financial troubles have been long documented, but Preston W. Williams, the chairman of the university's board of directors, says that the bankruptcy filing will not only allow the school to survive, but will also help it "thrive."

Morris Brown has a rich tradition of academic excellence. Sources say that Fountain Hall, which needs urgent maintenance, once housed W.E.B. Du Bois, among other noteworthy thinkers.

By filing for bankruptcy, Morris Brown hopes to preserve the legacy of Du Bois and other famous historical figures, as well as preserve its current educational services. In the words of Williams, "our commitment is to focus on restructuring and making it possible for us to survive another day."


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