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Sunday, August 26, 2012

Morris Brown files for bankruptcy protection


Facing more than $30 million in debt, Morris Brown College officials have filed for Chapter 11 bankruptcy.

The Atlanta Journal-Constitution reports (http://bit.ly/PJoc32 ) that the move is a last ditch effort to prevent the school from being foreclosed on and sold at auction.

The 131-year-old historically black college is facing foreclosure next month after investors called $13 million worth of bonds tied to the school.

The bonds were issued in 1996 by the Fulton County Development Authority. The school had pledged several pieces of property as security. An auction of assets was set for Sept. 4.

Chapter 11 gives federal protection to businesses unable to pay their debts and allows reorganization. A lawyer for Morris Brown says the emergency filing delays the foreclosure until a judge decides otherwise.

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