Daily Progress, Jacksonville, TX

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February 12, 2013

Federal judge confirms Lon Morris College's bankruptcy plan

LMC estate official Dawn Ragan said employees of the college will be paid what they are owed

TYLER —

Federal Bankruptcy Judge Bill Parker issued a formal order this week confirming the Lon Morris College bankruptcy estate sale and debtor's plan of reorganization — in effect, formally returning certain rodeo grounds and related property back to the city of Jacksonville.

The order, filed Monday in United States Bankruptcy Court Eastern District of Texas, releases the LMC bankruptcy estate from nearly all legal liability arising from this Chapter 11 bankruptcy case, except for action taken by the Texas Attorney General's Office, the Texas State University System or any other "governmental unit."

Payment for the Lon Morris College employees who have not been reimbursed for their final weeks at LMC was not addressed in either the judge's order or the final liquidation plan. But LMC Chief Restructuring Officer Dawn Ragan and Houston attorney Hugh Ray III assured reporters they reached agreements with several Methodist foundations that are expected to result in former employees receiving all the back wages they are owed – pending approval by the foundation boards and their regulatory agencies.

"The Texas Annual Conference of the United Methodist Church organized an earlier humanitarian appeal that generated enough funds to cover one missed payroll for the school’s former employees," Ragan said in a press release.

Parker's order acknowledges the fourth version of LMC bankruptcy estate's liquidation plan, and awards auctioneer Ameribid nearly $170,000 in fees and marketing expenses.

Ameribid accidentally sold the rodeo grounds and city property to a high bidder during a January auction, before Judge Parker later intervened and returned the property to the city.

Ameribid's payment constitutes 7 percent of the $2.2 million the January auction garnered in January plus $16,743.29 that comprises 50 percent of the marketing expenses associated with the auction.

The high bidders for that auction were Jacksonville-based office supplier 11 x 17, which accumulated most of the property, the Jacksonville ISD, and William Adcock Jr.

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