Daily Progress, Jacksonville, TX


February 1, 2013

SHOWDOWN: Lon Morris College bankruptcy hearings seemingly devolve into series of disputes; Texas AG asks for answers

Confirmation hearing on LMC liquidation plan takes place in Tyler's federal bankruptcy court Monday and Tuesday

TYLER —  It's a mess.

There's really no other way to put it. According to filings and counter-filings in federal court, the Lon Morris College bankruptcy process has evolved into a tangled web of conflicting professional agendas, overlooked liens, allegedly mismanaged funds, finger pointing, over-billing, jurisdictional transgressions, media bullying, mistruths by omission and the delusion that somehow all of the germane issues are going to be completely settled by early next week.

Texas Attorney General Greg Abbott is searching for answers and appropriate resolution in the matter. In a fierce series of court filings over the past couple of weeks, the AG and his staff have made his stance clear that officials with the LMC bankruptcy estate should explain themselves  to Federal Bankruptcy Judge Bill Parker.

LMC estate officials revised their liquidation plan Tuesday to accommodate some of these concerns, but the AG quickly fired back that the proposed changes didn't truly address many of the important problems.

Abbott's office also has expressed concern that the recent auction of LMC assets in Dallas was not as transparent a process as it should have been.

From a proposed release from liability that a previous version of the liquidation plan afforded LMC estate officials to the sale of Jacksonville city land that did not actually belong to LMC during an auction, Abbott asserts that there are many issues that need to be addressed next week.

Officials with the Attorney General's Office have urged Judge Parker in writing not to approve the results of the recent property auction or LMC's formal liquidation request when the confirmation hearing is held in court Monday and Tuesday.

Abbott was quick to point out that despite much confusion and nearly not enough resolution, the parties governing the liquidation process have charged the estate more than half a million dollars for their work to date.

Text Only