Daily Progress, Jacksonville, TX

Local News

April 19, 2013

A QUESTION OF TRUST – OR TRUSTEE? LMC 'liquidating trustee' blames AG for delay in paying LMC employee back wages

JACKSONVILLE — By Ben Tinsley

btinsley@jacksonvilleprogress.com

The liquidating trustee for the Lon Morris College bankruptcy estate announced Thursday she hopes former LMC employees can be paid their back wages in a few weeks.

This statement issued by Dawn Ragan – in response to several requests for comment on the issue – comes as the unpaid LMC employees prepare to gather Saturday to discuss options in recovering their owed money.  

Ragan, plan agent and “liquidating trustee” for the LMC bankruptcy estate, is blaming the office of Texas Attorney General Greg Abbott for the delay. AG representatives have continually said this is not true.

In an emailed statement, Ragan said Thursday she “agreed to a settlement with two foundations prior to confirmation wherein the foundations would contribute at least $500,000 to be used specifically to pay the employee back wages.”

Ragan contends the foundations of which she speaks want the Texas Attorney General to approve and sign off on the deal.

“While the AG has indicated to us on multiple occasions they do not oppose the settlement, they have yet to give the foundations approval such that they could transfer the funds to us,” Ragan wrote. “It is extremely frustrating for us as well, and we continue to discuss and work with the AG’s office in an attempt to resolve multiple matters.  I am hopeful it will not be more than another few weeks.”

Ragan did not immediately respond to emailed followup questions for the specific names and contact numbers for these foundations.

Last year, the Texas Annual Conference of the United Methodist Church organized a humanitarian appeal that generated money to help cover one missed payroll for  former employees – an effort that has been cited by Ragan as an example of what she is trying to do now.

But the Rev. Joel McMahon with the local First United Methodist Church said Thursday as far as he knows there is not a similar effort going on right now.

Thomas Kelley, spokesman for Texas Attorney General Greg Abbott, could not immediately be reached to comment Thursday. But he has continually emphasized in previous interviews that Ragan remains the sole party responsible for employee reimbursement.

“The timing of if or when she will pay employees their back wages is totally up to her,” Kelley stated recently.

The LMC estate declared bankruptcy this summer. In mid-February, a federal judge approached a formal liquidation plan. But there was nothing in the official paperwork addressing payment for the employees who worked there during the institution's final days.

Frustration over the issue has driven the former employees to meet at 2 p.m. Saturday at the First United Methodist Church to discuss how to approach the issue. Jacksonville City Attorney Joe Angle will be there as well, although not in any official city capacity.

To recover LMC transcripts: Access http://www.bea-bearcat.com.

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