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



At one point, federal judge Parker alleged McKool Smith, the law firm representing Lon Morris, had overcharged the estate about $14,000 for over 30 man hours of over-billing. He docked them that amount before awarding the firm a separate $85,529.90 for work performed for LMC between July 2 and Sept. 30. Ragan was paid $144,001 recently for three month's work.

Ragan has been reluctant to release information about these developments to the media. She is known for long silences on the matter followed by overly-general public statements and press releases crafted by PR experts released outside the news cycles. These releases convey only the portions of the story she wishes to be heard.

Abbott and staff, meanwhile, continues to monitor the liquidation plan proposals, contending that Ragan and the other officials involved with the bankruptcy estate have provided themselves and former LMC board members with an inappropriate discharge of liability for the way they are conducting the bankruptcy process.

In the original third version of the liquidation plan it stipulated that Ragan, all other professionals retained by the bankruptcy estate – or any of their agents or successors – the estate itself, and certain members of the former board of trustees couldn't be held liable for their actions in connection with this case by any claim holder, interest holder, or other party of interest. This included acts of omission, the case itself or the decision to file bankruptcy.

This are several, at least six, objections filed in federal bankruptcy court against LMC's Monday auction confirmation and estate liquidation — not counting the city of Jacksonville's complaint that the college estate auctioned off property it legally owns despite being repeatedly asked not to.

But in response to the many concerns about the upcoming confirmation hearing, Ragan on Wednesday drafted her fourth version of the plan, which appears to accommodate the concerns of the taxing authorities and ensures that rodeo grounds and related property that were inadvertently sold to a high bidder will instead return to the city of Jacksonville, which legally owns it.

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