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.

Facing Foreclosure Morris Brown College to Be Sold

Morris Brown is facing foreclosure next month, after investors called $13 million worth of bonds tied to the college. An auction of assets, including the administration building, is scheduled for Sept. 4.

For more than a decade, Morris Brown College has clung to life as it struggled academically and financially in the face of growing debt and dwindling support.

Now, one of the country's oldest black colleges, which at times boasted an enrollment of more than 3,000 student, is now down to about 50, and all but dead.

"This is heartbreaking and not only a sad day in the life of Morris Brown, but in black academia," said former Atlanta City Councilman Derrick Boazman, a 1990 graduate of Morris Brown. "The school is needed now more than ever." 

Atlanta church steps in to help Morris Brown pay debt

Cascade United Methodist Church, in Atlanta, presented a $22,000 check to Morris Brown College Sunday to help the college paying off a $500,000 debt to the U.S. Department of Education. The funds represented the exact amount needed to help the 130-year-old college eliminate its federal government debt. The U.S. Department of Education's offer to settle the college’s multi-million dollar debt with an amount of $500,000. With Cascade’s donation, Morris Brown will have more than enough funding to pay the settlement, due Wed., Aug. 24th. “We recognize the historical significance of Morris Brown College to our community and the world,” says Rev. Dr. Moss.  “We are grateful that our Cascade members have answered the call during these tough economic times. We are called to be a light in the community so we are pleased to participate in this vital way.”

Morris Brown to settle $10 million in fed debt

Morris Brown College is expected to settle nearly $10 million in debt for pennies on the dollar in an agreement pending with the U.S. Education Department.

In the April 7 letter, obtained by The Associated Press, the Education Department said it will forgive more than $9.4 million in debt, provided Morris Brown pays the remaining $500,000. The deal would help the college overcome a major hurdle in its efforts to regain accreditation.

Morris Brown College President Stanley Pritchett said the settlement agreement could be finalized as soon as May 1 and that the payment would be due within 90 days of the signed deal. The letter, signed by Department of Education counsel Russell B. Wolff, says the agreement must also be approved by the Department of Justice.

Morris Brown building auctioned to pay debt

Morris Brown College was unable to keep one of its buildings off the auction block Tuesday.

Jordan Hall was sold for $900,000 in a foreclosure sale on the steps of the Fulton County courthouse. The proceeds from the sale will be deducted from the college's $13.1 construction loan debt for the building.

Jordan Hall houses classrooms and an art gallery and had twice before been scheduled for auction in January and February.

It is the latest in the school's setbacks as it struggles to emerge from $30 million in debt. Last month, Morris Brown was granted an extension on $214,000 in overdue water bills.

Supporters say the sale will not close Morris Brown. Dorms will remain open and students and faculty will continue to report to classes.


The building was sold Tuesday for $900,000 in a foreclosure sale on the steps of the Fulton County courthouse.

The proceeds will be deducted from the college's debt from a $13.1 million construction loan for the building.

Jordan Hall houses classrooms and an art gallery and had twice before been scheduled for auction in January and February.

It is the latest in the school's setbacks as it struggles to emerge from $30 million in debt. Last month, Morris Brown was granted an extension on $214,000 in overdue water bills.

Supporters say the sale will not close Morris Brown. Dorms will remain open and students and faculty will continue to report to classes.

Water restored at Morris Brown, for now

A judge ordered the City of Atlanta Friday to reconnect water service that had been off since Dec. 12, but he said the Department of Watershed Management had court-approval to cut off service again if the school did not make it’s next scheduled payment of $214,000 by Feb. 17.

On January 4, the dorms open for the spring semester, which starts in less than two weeks, because the water was on.

Still, the school is facing another crucial deadline. On Tuesday, Jordan Hall, which contains classrooms and the Ruth Hall Hodges Art Gallery, is to be auctioned on the Fulton County Courthouse steps to satisfy several liens against the property by the city of Atlanta, a real estate broker and a plumbing contractor.

“The issue of the water problem is not the only problem at Morris Brown College,” said acting President Stanley J. Pritchett Sr.

Pritchett said negotiations continued with the bond holder to delay the sale to settle those liens. He said selling the property now would not reflect the true value of Jordan Hall, which sits on the edge of the Morris Brown campus.

By Saturday evening, donations of more than $47,000 for the day had been tallied. That number did not include a stack of checks still to be counted or the $10,000 four-time Olympic Gold Medal winner Angelo Taylor has promised the school he graduated from in 2006.

“It’s home,” Taylor said. “This school holds a great tradition.”

Also see: Water shut off at Morris Brown

Final bell may have tolled at Morris Brown

After enduring the conviction of its president on charges of embezzlement Morris Brown College has managed to endure. It has kept going despite losing its accreditation and seeing its enrollment, once near 3,000, plummet to 56 students.

Now, Morris Brown faces additional challenges to pay $1.5 million in critical bills may not make it.

Stanley Pritchett, acting president of the 127 year-old school said Saturday, they lack money to pay faculty and staff salaries, utilities and other operating expenses.

The school’s financial troubles intensified last week, when the city of Atlanta shut off water service to the campus.

The city said Morris Brown owes about $380,000 in water bills, some dating to 2004. When the school fell behind on a payment plan to reduce the debt, the city cut off the water — and, perhaps, Morris Brown’s future.

The campus simply cannot reopen unless the water comes back on, Pritchett said. “You’ve got to have basic services.”

School officials are scheduled to meet with bankers on Monday, hoping to secure a short-term loan, said Rhonda Copenny, a Morris Brown trustee. The college continues to work on a long-term restructuring of its $32 million debt.

Without “bridge financing,” Copenny said, the school is no more than three weeks away from closing permanently.

Even with a short-term cash infusion, the college faces tough obstacles, court records indicate. Contractors have filed several liens over unpaid bills.

A real-estate broker hired to arrange commercial development on campus has put filed a $230,000 lien. A plumbing company that had already filed a $116,000 lien escalated the case by suing the school Dec. 17.

The city, too, filed liens to prevent Morris Brown from selling property before making good on its water bills.

On Dec. 12, the last day of the fall semester, city officials told the school to pay the full $380,000 immediately or they would terminate water service, Pritchett said. City workers turned off the spigots Dec. 15.

Pritchett said he has appealed for leniency from Mayor Shirley Franklin and has talked with two of her aides, “but as of this date, I have not been able to get any kind of flexibility in resolving it.”

City officials say they gave Morris Brown plenty of chances. Once a customer defaults on a payment plan, though, the account becomes due in full.

“The city doesn’t renegotiate,” said Janet Ward, a spokeswoman for the Watershed Management Department.

Franklin’s spokeswoman, Beverly Isom, said, “This problem has been apparent for some time. I don’t think it’s because they don’t have water that Morris Brown has financial problems.”

This potentially fatal blow comes as Morris Brown has begun something of a rebirth. Last spring, the General Assembly allowed the school to begin accepting students who receive the state’s HOPE scholarship. Enrollment this fall more than doubled to about 240.

“The institution has been a major part of the landscape of this community,” Pritchett said, “and it certainly deserves to remain a viable part of the community.”