ATLANTA (WAOK/AP) — Facing more than $30 million in debt, Morris Brown College officials told a packed gymnasium of supporters on Saturday the school has filed for Chapter 11 bankruptcy.
The move is a last ditch effort to prevent the school from being foreclosed on and sold at auction and gives the school time to regroup.
The 131-year-old historically black college is facing foreclosure next month after investors called $13 million worth of bonds tied to the school.
The bonds were issued in 1996 by the Fulton County Development Authority. The school had pledged several pieces of property as security. An auction of assets was set for Sept. 4.
Chapter 11 gives federal protection to businesses unable to pay their debts and allows reorganization. A lawyer for Morris Brown says the emergency filing delays the foreclosure until a judge decides otherwise.
Board Chairman Preston W. Williams told the crowd on Saturday. “Our commitment is to focus on restructuring and making it possible for us to survive another day.” The event at times took on the feel of an old time church service with several hymns sung and people rejoicing in the fact that the school is still alive through all of its problems.
Morris Brown President Stanley Pritchett was upbeat and optimistic when he told the crowd of several hundred people that their beloved school isn’t going anywhere. “We are making a statement that Morris Brown College is not going anywhere,” Pritchett said. “We are not going to allow this latest challenge to get in the way of what we are trying to do.”
The crowd also heard words of encouragement from Atlanta city council president Ceasar Mitchell a member of the Morris Brown board of directors.
The program in the gymnasium was followed by a tour of the campus and prayer vigil. Many of the schools buildings and facilities are boarded up and are no longer in use. Morris Brown enrolled 50 students this year.