Daily Progress, Jacksonville, TX

Local News

October 5, 2012

Lon Morris to liquidate all of its assets through auctions

JACKSONVILLE —

Attorneys for Lon Morris College filed a petition last week in the Eastern District of Texas Bankruptcy Court for permission to liquidate all of its assets, including buildings and property in a cash-only auction.

The document was filed in Tyler and the hearing is scheduled for 9:30 a.m. Oct. 31, where the judge can approve, deny or amend LMC's request.

The oldest junior college in Texas hired Bridgepoint Consulting in May to help restructure its large amount of debt. In July, the college filed for Chapter 11 bankruptcy and hired Capstone Partners LLC to help it facilitate a transaction with another educational institution or strategic partner.

In August, the Department of Education suspended LMC's Title IX status, and the bankruptcy court revoked the privilege of participating in HEA programs, which allowed LMC to disburse federal funds and federal student aid such as the Pell Grant, Teacher Education Assistance for College and High Education grants, Federal Work Study and direct loan programs.

Jacksonville City Attorney Joe Angle, who is representing the city on two matters pertaining to the college including an outstanding water bill and the rodeo arena property, said funds raised from the liquidation will be used to pay its creditors.

He said teachers and staff would be paid first, followed by those who provided debt issuance loans, then secured creditors and unsecured creditors.

Liens on property have been filed by Amegy Bank, N.A., the Scurlock Foundation, Austin Bank and Texas National Bank, the document states.

Tim McRae, a non-executive board member for the college, said he feels its important for the teachers to be paid back first.

“I think that is the most odd experience I ever had and watching the staff and faculty stand by that college knowing they aren't getting paid,” he said. “I don't know how many of us would do that. They cared about those students and they love this community. They really bet their incomes on trying to keep that college open.”

According to the debtors application to employ an auctioneer, filed with the court on Sept. 28, Capstone Partners has suspended its efforts and the college is working on a plan to liquidate its assets.

“Because of many factors, including the loss of Title IX eligibility, Capstone has now suspended its efforts, though parties did express interest in the assets,” the document states.

Capstone agreed to change its agreement with LMC to act as a buyer's broker, which represents a buyer to find property and help it through the purchase, documents state. The auctioneer plans to pay Capstone a 2 percent fee for any property it helps facilitate the purchase for.

The college wishes to employ Tranzon as the auctioneer, which will be paid a 10 percent buyers premium paid by the purchaser but will pay half of marketing expenses for the sale, not to exceed $35,000.

The college proposes three auctions to ensure the maximum value for the property, documents state.

The first is a sealed bid, with a deadline of Nov. 13, and if necessary a live auction on Nov. 15. If there are no bids on personal property in the auctions, it will be sold in an internet auction proposed on Nov. 27.

“Lon Morris College believes, in the exercise of its business judgement, that the proposed sale of the property will generate the most value for the benefits of the creditors of the estate with the least amount of risk of further diminution of the value of the estate,” documents state.  

McRae said he would have liked to have seen the college move to another institution, but has no idea what is in store because he is not on the executive committee, which is in control of how Bridgepoint proceeds in the bankruptcy process.

“At a point you have no other option but to liquidate,” McRae said. “You have that responsibility to the creditors. They deserve for you to try your best to optimize your return, and a Chapter 11 still takes money. When that runs out you have to do the best you can.”

Dawn Ragan, chief restructuring officer for Bridgepoint Consulting said she had no comment on the future of the college or where it stands in the bankruptcy hearings.

“I don't have any answers at this time,” she said. “We are trying to figure all that out.”

1
Text Only
Local News
  • Christian Rapper 0419.tif Local rap artist spreads the 411 on Jesus

    "I have seen things in my life that would make Dr. Phil crazy," Jacksonville native, ordained minister and aspiring rap artist Stephen I. Crow Jr. said with a laugh. "That's why I don't label my music specifically as "Christian rap" -- yes, Christians who love rap can listen and hopefully be uplifted, but I truly want and am trying to bring the word and Jesus' message to people who may never have heard it or don't believe it's for them.

    April 19, 2014 1 Photo

  • Tomato Bowl flushed to bottom of priorities

    The historic Tomato Bowl, built in 1940, stands strong on the outside, but according to some people the inside needs a lot of work in order to not be an eyesore.

    April 19, 2014

  • Cherokee County arrest: April 8-14

    The Daily Progress will publish a list of arrests from the Cherokee County Sheriff's Office on a weekly basis.

    April 19, 2014

  • Jacksonville College, high schools team up to offer dual credit program

    Jacksonville College is currently offering qualifying high school juniors and seniors attending Jacksonville and New Summerfield ISDs and The Brookhill School in Bullard the opportunity to get head start on their higher education.

    April 18, 2014

  • JISD board members to consider district strategic plan

    The Jacksonville ISD Board of Trustees will meet at 6:30 p.m. Monday, April 21, to discuss a district strategic plan and consider buying new band uniforms.

    April 18, 2014

  • 2 men arrested after standoff in grocery store

    Two men were arrested early Wednesday morning after a standoff at the B&B Foods in Alto.
    According to Alto Police Chief Jeremy Jackson, a person reported seeing two black males at the store just before 3 a.m. Wednesday.

    April 17, 2014

  • Some area entities closed for holiday

    Many area offices and businesses will be closed Friday in observance of Good Friday and Easter.

    April 17, 2014

  • Dispatcher Enge 0416.tif JPD dispatcher killed in wreck

    A dispatcher for the Jacksonville Police Department was killed Monday on her way to work, according to officials.
    Amber Enge, 35, of Whitehouse was pronounced dead at the scene of a one-vehicle wreck Monday afternoon on CR 2177 in Whitehouse.

    April 16, 2014 1 Photo

  • CR speed limit changes, E-filling fee top agenda

    On Monday, Cherokee County commissioners set April 28 to hold public hearings concerning the changing speed limits on two county roads.

    April 16, 2014

  • Catherine look.tif Religious lines drawn: Protesters met by members of Church of Wells

    Other than a few community members' voices that rose above the crowd, the protest Saturday against the Church of Wells remained peaceful.

    April 15, 2014 3 Photos