POSTED: Monday, July 2, 2012 - 11:04pm
UPDATED: Monday, July 2, 2012 - 11:21pm
JACKSONVILLE — After more than a year of financial turmoil which culminated in the 'furloughing' of all but 11 of its employees, Lon Morris College in Jacksonville has now filed for Chapter 11 bankruptcy.
The consulting firm's restructuring officer Dawn Ragan sent KETK the following release late Monday night.
LON MORRIS COLLEGE FILES CHAPTER 11 PETITION
Lon Morris College filed a voluntary chapter 11 bankruptcy petition today in the Eastern District of Texas, Tyler Division, case number 12-60557.
The College has experienced negative cash flow in recent years by overextending itself in an attempt to increase enrollment, taking on significant debt. The College recently hired Capstone Partners to facilitate a transaction with another educational institution or strategic partner, which the school is trying to complete this summer.
The College is continuing to work on its financial restructuring efforts, however, the timing of the filing was necessitated by a foreclosure proceeding on certain dormitories scheduled to proceed Tuesday, July 3. Dawn Ragan of Bridgepoint Consulting, the Chief Restructuring Officer, said “Lon Morris continues to receive strong support from many of its creditors, as well as its faculty and employees, and the general community.
We are operating with core staff, and continue to work on a modified academic program that will continue compliance with the SACS accreditation policies for the upcoming academic year.” With the filing of the petition, the College may now concentrate on finding a partner or consummating a transaction that will allow the college to continue its core mission of educating students, as it will realize some relief from its creditors.
The bankruptcy filing will put off legal or collection actions against the college. The petition was filed by the Chief Restructuring Officer. The case has been assigned to Judge Parker in Tyler.