Morris Brown College tells bankruptcy judge it is working on two financial plans; discloses possible new buyer
By Maria Saporta
Morris Brown College is working on two different financial plans that would provide secure its future, its representatives told U.S. Bankruptcy Judge Barbara Ellis-Monro Friday.
Morris Brown lawyers said they were working until 11 p.m. Thursday night on a “consensual” plan with the bondholders holding the college’s debt. Morris Brown filed for Chapter 11 bankruptcy in August, 2012 because it had accumulated more than $30 million in debt.
But if the consensual plan does not materialize, Morris Brown attorney John Moore said the college had alternative plan in the works.
“We have been working very hard to get a consensual plan done,” Moore said, adding that the college also had a back-up. “We are prepared to file our own alternative plan.”
Morris Brown College President Stanley Pritchett was then asked to take the stand and talk about the alternative plan. Pritchett disclosed that the alternative buyer was Atlanta-based developer Pope & Land Enterprises.
Robert Mercer, an attorney with Bryan Cave who is representing one of the larger creditors — U.S. Banks, asked for more specifics about the deal. But Pritchett said some of that information was confidential.
WSB-TV Channel 2 reported later that the Pope & Land offer would net the creditors between $12 million and $13 million.
In June, Morris Brown had presented a financial plan worth $20 million whereby an entity called FD LLC would have purchased the school’s property. The speculation at the time was that FD stood for Family Dollar stores. But that deal fell through. Since then, Morris Brown has been trying to come up with another financial plan and possibly finding another buyer.
The court has given Morris Brown the exclusive right to come up with a financial plan. But Mercer and the creditors urged the judge to end the exclusivity period.
“This debtor needs a little pushing to move things along,” Mercer told the judge. “Exclusivity has gone on long enough… We are skeptical about whether an extension (for exclusivity) is appropriate.”
By ending exclusivity, then the creditors could put together their own financial plans for Morris Brown’s assets.
But Morris Brown officials expressed concern that the creditors would be less concerned about the future of the college than if Morris Brown were in control.
Pritchett said the college currently has 35 students enrolled. The college lost its accreditation in 2002. But Pritchett said that the college is working on a plan so it could regain its accreditation in three years.
Pritchett also said both plans would be consistent with the city’s master plan and would be consistent with the vision that Vine City and the Atlanta University Campus have for the area. He also said the college would be willing to work with any plans that would help in the development of the new Atlanta Falcons football stadium.
Given that the college said it was close to coming up with a deal, Judge Ellis-Monro gave Morris Brown another 30 days to file a financial plan.
Then after she left the courtroom, the attorneys for Morris Brown and the attorneys for the creditors huddled in a closed room to continue to work on a possible “consensual” plan.