The deliberations of senior secured lender Amegy Bank dominated the Lon Morris College bankruptcy auction proceedings this week, and probably was responsible for the auction extending a second day into Tuesday, a Jacksonville official said.
Joe Angle, Jacksonville city attorney — who was there to watch over the interests of the city — witnessed the deliberation of Amegy Bank officials because he was housed in a conference room with them.
"Officials with Amegy, as the primary secured creditor, were analyzing bids on each of the many various pieces of property and deciding if they wanted to accept them," Angle said.
This week's proceedings strayed far from the format of a traditional "auction" image. Prospective bidders did not gather together in one audience to raise their hands and make bids. There was no gavel-banging master of ceremonies concluding each sale on the spot.
Instead, bankruptcy bidders were sent to conference rooms in the Dallas offices of McKool Smith PC — the law firm representing the estate — while secured and unsecured creditors were seated elsewhere, separately.
Instructions, bids and counter-bids were conveyed from room to room by employees of AmeriBid, the company hired to handle the auction, Angle said.
"It was nothing like the traditional idea of the auction," Angle said. "We never even saw the bidders. It went on for three hours. … The room we were in with Amegy was one big conference room."
Amegy has a vested interest in Lon Morris, starting with the $750,000 "debtor in possession" loan it provided the college in July in exchange for filing Chapter 11 instead of Chapter 7 bankruptcy, court documents show.
In December, Amegy then led a "a syndicate of lenders” that included Amegy Bank, N.A., Scurlock Foundation, Heartspring Methodist Foundation, and Martha Squibb to provide LMC with a second, $500,000 DIP loan.
Angle was at the auction to protect and recover the city's specific interests — the rodeo grounds, recreation center, old National Guard armory, basketball court, and a couple of practice fields.
"There was some offers for them, but I said, 'Look we just want it back,'" Angle said. "Once the final gavel comes down on the final bankruptcy plan, once the final deal is made, we want it to be our property again."
Even if Amegy officials give their OK to the sale, everything must go before Judge Bill Parker, of the U.S. Bankruptcy Court for the Eastern District of Texas, who is the only one who can authorize the sales as final.
As bankruptcy officials move toward an ending to the financial part of Lon Morris College, alumni are preparing for a special "homecoming" ceremony celebrating the school's life, ministry and legacy.
The ceremony takes place at First United Methodist Church, 1031 SE Loop 456, at 10 a.m. on Saturday, Jan. 26, according to a post on the website of the Texas annual Conference of the United Methodist Church that has been confirmed by former Lon Morris employees.
A reception will follow.
Several alumni groups are organizing reunions around this event, according to the website.
Keith Jenkins, one of the former chaplains, has offered to put together a slide presentation of pictures to be submitted by alumni, the announcement shows.