Daily Progress, Jacksonville, TX

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March 26, 2013

McCall to settle with LMC for a fraction of what he was asking

TYLER — Representatives of the quickly-liquidating Lon Morris College estate have reached a tentative financial settlement with Dr. Miles McCall — for one-fifteenth of the amount the former LMC president was asking.

In a filing in February, McCall had demanded roughly $155,000 — $74,289.26 in back wages, $50,000 of that is deferred compensation, as well as repayment for an $80,000 personal loan he alleged he made to the institution.

For unspecified reasons — McCall did not respond to a request for a comment Tuesday — the former LMC president has agreed to accept $10,000 of the $155,000  for which he was asking, relinquishing the remainder and formally recognizing it as a “charitable contribution” to the LMC estate, according to paperwork filed in bankruptcy court by Lon Morris College Plan Agent Dawn Ragan.

McCall's claim was filed well after federal bankruptcy Judge Bill Parker in February had already issued a formal order confirming the Lon Morris College bankruptcy estate sale and debtor's plan of reorganization.

McCall, meanwhile, has been accused of illegally liquidating an endowment fund earmarked for Sam Houston State University. He is in the process of being sued  by both the Texas Attorney General's Office and by SHSU officials — under the guidance of the AG's office.  

This proposed compromise agreement will not prejudice the estate's claims against anyone — including McCall, Ragan wrote.

Around the same time McCall filed the paperwork for his back-pay demand, Tilley, LLC filed their own paperwork requesting a general unsecured claim against the LMC estate in the amount of $4,903,000.

Ragan told the court her objection to Tilley's claims is complex, raising issues of law and potentially requires expert testimony or  Dr. McCall's action was taken well after the fact.

McCall, Ragan, and Hugh Ray, an attorney working with the LMC estate, all could not be reached to comment Tuesday.

In regard to the McCall lawsuits, both SMSU and the attorney general – the AG in its capacity as the protector of the public's interest in charity – seek to recover over $1 million in lost endowment monies SHSU officials contend they should have been forwarded when LMC first declared bankruptcy.

Thomas Kelley, spokesman for Texas Attorney General Greg Abbott, said it took awhile to get a court response from McCall on both fronts.

“Our attorneys tell me Dr. McCall filed his answer in the AG lawsuit in Travis County yesterday - in the form of a general denial, which is routine,” Kelley said in a Tuesday email.

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