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September 27, 2013

Texas AG and Lon Morris rep square off over $1.017 million in endowment money

JACKSONVILLE — Representatives of Texas Attorney General Greg Abbott are again at odds with Lon Morris College bankruptcy estate Plan Agent Dawn Ragan — this time over $1.017 million in endowment money state officials say should already have been disbursed to Sam Houston State University.

The issue tracks back to October 2012, months after LMC representatives first filed for bankruptcy in federal court.

This is shortly after Ragan, a representative of Bridgeport Consulting, first was hired as LMC's chief restructuring officer. (She later transitioned to the position of plan agent.)

The endowment originally was created by Rusk native Dr. James “Jimmie” Duncan Long, an educator, philanthropist and Lon Morris College grad.  Dr. Long (1925-2009) left the money to LMC to be used by its Henderson Library with a percentage of the annual interest to be used to purchase library acquisition and the rest of the interest to be reinvested.

Most importantly, Long specifically stipulated the money would go to Sam Houston State University if LMC ever closed its doors.

AG officials say the endowment money should have been disbursed to SHSU the minute Lon Morris College closed.

Ragan, however, contends in a lawsuit against former LMC President Miles McCall and his board of trustees that the bankruptcy estate should receive the endowment money because of damage inflicted by McCall during his July 2005 to May 24, 2012 tenure. Dr. McCall has repeatedly declined to comment on any of the legal matters surrounding his departure.

As part of the McCall-trustees lawsuit, Ragan filed a formal objection to SHSU's endowment claim, alleging “McCall's improper use of the Long Endowment caused Lon Morris damages in excess of $1.017 million.”

Ragan contends McCall exposed Lon Morris College to an additional $17 million in claims filed in the bankruptcy case by SHSU and the Texas AG  for violating the public trust.

 Ragan did not return requests for comment Thursday.

The AG specifically filed a “supplemental response” to Lon Morris's objection to the SHSU claim , AG Spokesman Thomas Kelley said.

Abbott's attorneys have come into conflict with Ragan before in regard to the dissolution of Lon Morris College.

Ragan and attorneys representing the LMC estate have long represented the Texas Attorney General's Office as being adversaries to the bankruptcy process. She also contended the AG was holding up the final paychecks to former Lon Morris employees — an allegation Kelley has continually said is absolutely not true.

Before it closed, Lon Morris College was the oldest school in continuous operation in East Texas.

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