Jacksonville Daily Progress
Officials with Southern Association of Colleges and Schools (SACS) said they will work with Lon Morris College to keep its accreditation, although the college has filed for a voluntary Chapter 11 bankruptcy petition.
Dawn Ragan, chief restructuring officer with Bridgepoint Consulting, said filing the petition allows the college to concentrate on either finding a partner or consummating a transaction with another educational institution with some relief from creditors.
“Lon Morris continues to receive strong support from many of its creditors, as well as its faculty and employees, and the general community,” she said in a press release. “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.”
Dr. Belle Wheelan, president of SACS commission on colleges, said filing a Chapter 11 bankruptcy doesn't mean the institution is going out of business, but that it is restructuring its finances.
“It gives them a chance to look at the finances, restructure, and pay off bills without losing everything today,” she said. “Rather than having a company take over the institution or a piece of it in exchange for what it owes, this is saying, back off and give us a chance to regroup.”
The press release stated the timing of the filing was necessitated by a foreclosure proceeding on certain dormitories scheduled to proceed on Tuesday.
Wheelan said a college does not automatically lose accreditation just because it has filed for bankruptcy.
“We don't automatically drop an institution,” she said. “We give them time to work through the issues that face them. We base our loss of membership on continuance of non compliance of our principles.”
Weelan said Lon Morris College needs to comply with all SACS principles including the board being the active policy-making body for the institution, having adequate resources to support the mission of the school, auditing financial aid programs and exercising appropriate control over all its financial resources.
Weelan said because higher institutions cannot be treated like a business, the board is responsible for making sure the school is in compliance.
Ragan said summer online courses are currently being offered and will continued to be offered as there is a demand for them..
“The institution has to have students to still be in operation,” Weelan said. “But having students doesn't mean they have to be there in the summer. They can wait until the fall to get their act together. But this is why they need somebody familiar with higher education.”
At the beginning of May, the LMC board of trustees hired Bridgepoint, a reorganization firm, to analyze and restructure the two-year institution.
The board of trustees reviewed Brigepoint's assessment and determined an agreement with another institution would be best to continue the college's mission.
According to the press release, 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 oldest private two-year college in Texas accumulated significant debt after it overextend itself in attempt to increase enrollment in 2010.