Morris Brown returns to bankruptcy court with a new $1.5 million loan
By Maria Saporta
The legal proceedings of Morris Brown College’s bankruptcy will resume Monday in the courtroom of U.S. Bankruptcy Judge Barbara Ellis-Monro.
According to legal filings submitted to the court last week, Morris Brown will be seeking to stay open for the foreseeable future thanks to a new $1.5 million loan that the African Methodist Episcopal Church is willing to provide.
Morris Brown College filed for Chapter 11 bankruptcy in August 2012 to prevent going into foreclosure due to being an estimated $30 million in debt to multiple creditors.
Since then, Morris Brown has been trying to put together various financial plans to wipe away its debt and to be able to stay open.
Morris Brown lost its accreditation and federal funding in 2002 due to financial mismanagement and misuse of federal grants for student loans. The United Negro College Fund terminated its relationship with Morris Brown, and it was dropped as one of the institutions of the Atlanta University Center.
Since then, Morris Brown has been operating with a skeletal staff and faculty teaching about three dozen students.
The legal filing, described as an “emergency motion,” spells out how the new $1.5 million would be spent — on the college’s administrative costs as well on various interest payments on the College’s debt.
This proposal is quite different that what Morris Brown had been touting just a couple of months ago when it said that it had a $20 million offer from a company — FD LLC — to purchase the College’s property, help settle its debts and cover a portion of its annual operating costs.
The proposal was thought to be for a development that would include a Family Dollar store, even though representatives said that the discount retailer might not be part of the project.
Still, when Morris Brown appeared before the Judge Ellis-Monro in July, representatives acknowledged that the FD LLC had run into some obstacles and that they were working on a different financial plan.
Before the FD LLC proposal had surfaced, the City of Atlanta had made an offer to Morris Brown to buy its property and help settle its outstanding debts in a deal of nearly $10 million. Morris Brown turned down the city’s offer.
As it currently stands, Morris Brown holds the exclusive rights on its property until Aug. 26. The judge could decide to extend those exclusive rights or seek alternative proposals for the property.
Not only is the future of Morris Brown hanging in the balance, so is a possible game of musical chairs that involves the new $1 billion Atlanta Falcons stadium.
If the new stadium were to be built on the preferred site south of the Georgia Dome, two historically black churches — Friendship Baptist Church and Mount Vernon Baptist Church — would have to be acquired.
Friendship has stated that it would be open to being acquired only if it could stay in the Vine City community. After all, two of the Atlanta University Center institutions — Morehouse College and Spelman College — got their start at Friendship.
The preferred location for Friendship’s new home is the Morris Brown property on the site of the Middleton Tower dorms. No matter what happens to the Morris Brown property, it is possible — maybe probable — that Friendship would be part of the solution.
But that would depend on whether the new stadium would be built on the south site or on the north site about a half-mile north of the Georgia Dome.