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Historic Black College Morris Brown Seeks Bankruptcy Protection

Posted By admin || 28-Aug-2012

Historic Black College Morris Brown Seeks Bankruptcy Protection

Morris Brown College, a historical black college founded by freed slaves back in 1881, filed for Chapter 11 bankruptcy to stop foreclosure proceedings against the school. The college claims they were able to pay on certain debts but along with receiving notice of foreclosure against the establishment, filing for legal protection was seen as its last option to help stay afloat.

Morris Brown College reportedly has liabilities over $30 million.  Along with being served a foreclosure notice, portions of the school's land was set to be sold at auction in early September.  The college recently held their National Day of Prayer service and news of the school's bankruptcy filing was announced to those in attendance.  The bankruptcy filing will help cease foreclosure efforts giving the school more time to sort out financials.

At the prayer service, the school's attorney, Renardo Hicks, explained to more than 500 attendees what the bankruptcy filing means for the college.  He explained that a reorganization plan will be submitted for review within 3 months.  Hicks also explained the non-profit status of the school claiming it is suspended until further notice. This makes donations to the school ineligible as a tax deduction.  The school lost accreditation about 10 years ago and currently has less than 50 students enrolled.

The school has an outstanding loan due against the property for $13 million, yet school officials say they can afford to make the payment.  About a year ago, Morris Brown owed the U.S. Department of Education nearly half a million.  The school did receive donations to help pay off the debt through alumni and fundraisers.

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