Morris Brown College, a private Historically Black College University located in Atlanta, GA, has formally filed for bankruptcy, the Associated Press reports.
The decision came off the heels of a $30 million debt that afflicts the university. The move was a last-ditch effort to prevent the university from going into foreclosure.
An emergency filing delays the foreclosure until a decision is made by a judge.
The school, founded in 1881, may face foreclosure as soon as next month after investors called $13 million worth of bonds tied to the college. The bonds were issued in 1996 by the Fulton County Development Authority, according to the AP. Morris Brown reportedly pledged several pieces of property as security and an auction assets was set for Sept. 4.
Unless Morris Brown can raise enough funds and eliminated its debt, the school is in trouble.
Benjamin Harrison, a spokesman for the 6th District African Methodist Episcopal Church, told the Journal-Constitution “there is the need to raise millions of dollars to counteract that deficit.”
“But if that money is not raised, the school is in jeopardy,” he said.
The school has a history of financial problems. The college lost its accreditation and federal funding in 2002 from the Southern Association of Colleges and Schools due to a financial management scandal from 1998 to 2002 under the leadership of then-school president Dolores Cross. Additionally, the United Negro College Fund ended it support for the school.
Cross plead guilty to a charge of embezzlement in 2006 for illegally obtaining millions of dollars for federally insured student loans and Pell Grants in the names of ineligible students, alumni student, part-time students and even student who never attended the college.
“This is heartbreaking and not only a sad day in the life of Morris Brown, but in black academia,” said 1990 alumni Derrick Boazman, according to the Journal- Constitution. “The school is needed now more than ever.”
Morris Brown is currently in the process of trying to gain accreditation by the Transnational Association of Christian Colleges and Schools.
Chapter 11 gives federal protection to businesses unable to pay their debts and allows reorganization.
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