Posted 5:02 pm Wednesday, May 23, 2012
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UPDATE: Lon Morris Employees Furloughed, Not Fired, Trustee Says
Updated Wednesday, May 23, 2012 at 5:02 p.m. CDT
John Kroll, a Lon Morris trustee and economist with the firm Haley Romero Winick & Kroll Inc., said today that employees haven't been terminated, as has been reported in other media outlets, but “a great number of employees” have been furloughed as the school goes through reorganization over the next 30 to 60 days.
David Hubbard, director of student enrollment and retention services, said the school hopes to be able to rehire employees for the fall semester. All campus departments are functioning, with 11 employees still working, he said. Hubbard also confirmed that the employment actions today were furloughs.
Despite the assertions above, the letter received by affected employees makes no reference to furloughs. (However, the subject line of the e-mail says "furlough notice.) Here is the text of the notice that affected employees received today:
To Lon Morris College Faculty, Staff and Employees:
As you know, the College has experienced significant financial and liquidity difficulties and has missed its last 3 payrolls. The Board and a special Restructuring Committee of the Board has retained Bridgepoint Consulting as a restructuring advisor and appointed Dawn Ragan as Chief Restructuring Officer (“CRO”). The CRO is responsible for the day to day operation of the college and for making decisions relative to continued operations and exploring various potential restructuring alternatives. Given insufficient cash flow, the college cannot continue to employ personnel and further cannot allow employees to continue to work even on a “volunteer” or unpaid basis. Your loyalty to the College, and especially to the Mission, is very much appreciated, but unfortunately due to the current circumstances all employment by the College is hereby terminated on the earlier to occur of either immediately as of 5.22.12 or the last day worked prior to 5.22.12, subject to confirmation where appropriate, excluding a minimal core group. Vacation accruals, pursuant to company policy, are extinguished upon termination of employment.
In any case where an employee or other representative may have been extended campus housing or other room/board type benefits, those benefits are also hereby terminated, and the employee/tenant will be provided 10 (ten) days to vacate.
With respect to health care benefits, we have been unable to pay the premiums, and while we have not been notified to the contrary yet, it is our expectation health care benefits for all employees will be canceled in the near term due to non-payment of premiums. Accordingly, you may want to seek alternative coverage options immediately.
All property of the College including laptops, keys, credit cards, vehicles, etc. should be returned prior to end of the week to Carolyn Nanni in Human Resources. Please contact Carolyn to schedule an exit interview, return property, and/or address any questions or get further information.
Moving forward, the College and the restructuring professionals are working together with lenders and various stakeholders to facilitate short term aid which would provide extremely limited funding for a period of approximately 30 days. During that time frame the professionals are exploring and investigating multiple options that could permit the College to continue to operate on a go forward basis in some form. At the present time, in the absence of information to the contrary, we are assuming there will indeed be a Fall semester which we will gear up for once the 30 day assessment has been completed and alternatives have been analyzed. Accordingly, it is anticipated in the third week of June we will be able to provide an update relative to the future of the College and the Fall semester.
We regret the financial situation we find ourselves in, but are hopeful with the support of our Board and stakeholders we will find a viable and sustainable solution to our difficulties. We are very appreciative and respectful of the contributions and loyalty of each of you on behalf of the College and our mission, and respectfully ask that you continue to work with us for the next few weeks while we try to develop alternatives to maximize the value of the College and seek to get employees, and creditors paid. Thank you, and please let Carolyn know if you have questions, and we will try to address all of them quickly.
On Behalf of Lon Morris College,
Dawn Ragan
Chief Restructuring Officer
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David Hubbard, director of student enrollment and retention services, said the school hopes to be able to rehire employees for the fall semester. All campus departments are functioning, with 11 employees still working, he said. Hubbard also confirmed that the employment actions today were furloughs.
Despite the assertions above, the letter received by affected employees makes no reference to furloughs. (However, the subject line of the e-mail says "furlough notice.) Here is the text of the notice that affected employees received today:
To Lon Morris College Faculty, Staff and Employees:
As you know, the College has experienced significant financial and liquidity difficulties and has missed its last 3 payrolls. The Board and a special Restructuring Committee of the Board has retained Bridgepoint Consulting as a restructuring advisor and appointed Dawn Ragan as Chief Restructuring Officer (“CRO”). The CRO is responsible for the day to day operation of the college and for making decisions relative to continued operations and exploring various potential restructuring alternatives. Given insufficient cash flow, the college cannot continue to employ personnel and further cannot allow employees to continue to work even on a “volunteer” or unpaid basis. Your loyalty to the College, and especially to the Mission, is very much appreciated, but unfortunately due to the current circumstances all employment by the College is hereby terminated on the earlier to occur of either immediately as of 5.22.12 or the last day worked prior to 5.22.12, subject to confirmation where appropriate, excluding a minimal core group. Vacation accruals, pursuant to company policy, are extinguished upon termination of employment.
In any case where an employee or other representative may have been extended campus housing or other room/board type benefits, those benefits are also hereby terminated, and the employee/tenant will be provided 10 (ten) days to vacate.
With respect to health care benefits, we have been unable to pay the premiums, and while we have not been notified to the contrary yet, it is our expectation health care benefits for all employees will be canceled in the near term due to non-payment of premiums. Accordingly, you may want to seek alternative coverage options immediately.
All property of the College including laptops, keys, credit cards, vehicles, etc. should be returned prior to end of the week to Carolyn Nanni in Human Resources. Please contact Carolyn to schedule an exit interview, return property, and/or address any questions or get further information.
Moving forward, the College and the restructuring professionals are working together with lenders and various stakeholders to facilitate short term aid which would provide extremely limited funding for a period of approximately 30 days. During that time frame the professionals are exploring and investigating multiple options that could permit the College to continue to operate on a go forward basis in some form. At the present time, in the absence of information to the contrary, we are assuming there will indeed be a Fall semester which we will gear up for once the 30 day assessment has been completed and alternatives have been analyzed. Accordingly, it is anticipated in the third week of June we will be able to provide an update relative to the future of the College and the Fall semester.
We regret the financial situation we find ourselves in, but are hopeful with the support of our Board and stakeholders we will find a viable and sustainable solution to our difficulties. We are very appreciative and respectful of the contributions and loyalty of each of you on behalf of the College and our mission, and respectfully ask that you continue to work with us for the next few weeks while we try to develop alternatives to maximize the value of the College and seek to get employees, and creditors paid. Thank you, and please let Carolyn know if you have questions, and we will try to address all of them quickly.
On Behalf of Lon Morris College,
Dawn Ragan
Chief Restructuring Officer
------------------------------------------------------------
Updated Wednesday, May 23, 2012 at 3:10 p.m. CDT
By KELLY GOOCH
Staff Writer
John Kroll, a Lon Morris trustee and economist with the firm Haley Romero Winick & Kroll Inc., said employees haven't been terminated, but “a great number of employees” have been furloughed as the school goes through reorganization over the next 30 to 60 days.
He said the school is more or less required by its creditors and people working with it not to incur more staff salary obligations beyond what it currently had, and it's not fair to employees to have them come to work at this point.
“Although many of them want to, it's not fair for them to come to work while we're going through this process until we have ducks in a row,” Kroll said.
“It is my intention that everybody will be back and in place in ample time to have a good fall semester.”
Meanwhile, Lon Morris College President Dr. Miles McCall has tendered his resignation effective tomorrow, Board member Tim McRae confirmed this afternoon.
“He made the decision to resign. Pretty much he felt like his statement to us and the board was his mission was to keep the school open and felt at this point if it would serve reorganization effort better if he would step down,” he said.
McRae said Dr. McCall was told renegotiating with banks would look better if he stepped down.
“It was at a point where authority had been given to the (chief restructuring officer) anyway,” McRae said. “He hadn't been involved in the decision making. He asked 'Do I have a function I could aid in this reorganization?' and 'How can I be used the best and they told him it would help that if you told me you wanted to do what was best in reorganization effort, and (the officer) said it would be helpful to step aside, and she said the sooner the better.”
“His main concern was the viability of the college. He wanted to see it survive. I think he literally stepped aside for what would have been best with those efforts.”
McCall, who has been president seven years, notified the board Tuesday, and his resignation is effective tomorrow.
TylerPaper.com is investigating reports that numerous college staff members were terminated today, and will post additional details as they become available.
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Staff Writer
John Kroll, a Lon Morris trustee and economist with the firm Haley Romero Winick & Kroll Inc., said employees haven't been terminated, but “a great number of employees” have been furloughed as the school goes through reorganization over the next 30 to 60 days.
He said the school is more or less required by its creditors and people working with it not to incur more staff salary obligations beyond what it currently had, and it's not fair to employees to have them come to work at this point.
“Although many of them want to, it's not fair for them to come to work while we're going through this process until we have ducks in a row,” Kroll said.
“It is my intention that everybody will be back and in place in ample time to have a good fall semester.”
Meanwhile, Lon Morris College President Dr. Miles McCall has tendered his resignation effective tomorrow, Board member Tim McRae confirmed this afternoon.
“He made the decision to resign. Pretty much he felt like his statement to us and the board was his mission was to keep the school open and felt at this point if it would serve reorganization effort better if he would step down,” he said.
McRae said Dr. McCall was told renegotiating with banks would look better if he stepped down.
“It was at a point where authority had been given to the (chief restructuring officer) anyway,” McRae said. “He hadn't been involved in the decision making. He asked 'Do I have a function I could aid in this reorganization?' and 'How can I be used the best and they told him it would help that if you told me you wanted to do what was best in reorganization effort, and (the officer) said it would be helpful to step aside, and she said the sooner the better.”
“His main concern was the viability of the college. He wanted to see it survive. I think he literally stepped aside for what would have been best with those efforts.”
McCall, who has been president seven years, notified the board Tuesday, and his resignation is effective tomorrow.
TylerPaper.com is investigating reports that numerous college staff members were terminated today, and will post additional details as they become available.
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By KELLY GOOCH
Staff Writer
Staff Writer
The Texas Annual Conference of the United Methodist Church is taking steps to help Lon Morris College amid its struggle for survival.
Several ministers in the conference, along with the bishop and entire cabinet, have sent a letter asking members to either designate funds or take up a collection that will be designated to help Lon Morris pay salaries, said Paula Arnold, director of communications for the conference. The goal is to cover one payroll, which is about $250,000.
"We're very concerned about the employees there who are (multiple) payrolls behind, and we understand the hardship that places on (them) and their families, and there are many on the (conference) staff who care about them, and hopefully this is something that can be done to help alleviate that strain ..." Ms. Arnold said.
"Many of our ministers have attended Lon Morris and have deep affection for the college and deep concern for the staff there and the impact getting behind on payroll has on Jacksonville and the entire community."
Trustees at the private two-year, faith-based liberal arts school also hope reorganization efforts will salvage the institution.
They met with faculty and staff earlier this month about the school's financial problems and, after visiting with attorneys, decided it would look to engage a specialist, which could help it work through its financial issues.
Lon Morris has bled at least $4.4 million since the 2007-08 school year, with the past school year's possible losses yet to be tallied. Those cash flow problems led to at least four paycheck delays for employees within the last year.
"What they will do hopefully is go to some of our creditors who are holding endowments and free up some endowments, but also ... we have assets we can sell to help alleviate this problem," Dr. Jack Nelson, a member of the board's executive committee, said May 7.
"They will come in, look at the books and say, 'This is profitable. This is not' (or) 'We can renegotiate these for you.'"
In the meantime, he has said the college hopes to be able to get through the summer and has worked to get refinancing of some long-term loans so it can immediately save money.
"We would really like for Lon Morris to stay. That's what our long-range goals are, and we're working toward that. ... We're optimistic moving forward. We expect to be in operations in the fall and expect to get through the summer," Nelson has said.
As board members and the Texas Annual Conference try to help Lon Morris, local residents and others are weighing in on the school and its future.
State Rep. Chuck Hopson, R-Jacksonville, could not directly comment on Lon Morris' financial situation since he is not a board member. However, he said the school, financially, is good for Jacksonville and said students come out with a solid education.
"They get to spend time in a small rural town and have individual attention (from instructors), so it's important to Jacksonville to keep the institution," he said.
That's why Hopson said he is interested in maintaining the integrity of Lon Morris.
Since it is a private institution, the only thing the state can do is ensure that tuition revenue bonds continue to get passed, he said.
Sophomore Derrick Ferguson said he believes Lon Morris has good hands-on teachers who "help students out a lot" as well as good counselors who put students in the classes they need. But he has no projection on the school's future.
Sophomore Thedford Rhodes, who graduates this summer, said his experience as a college student was not what he thought it would be and his classes have been OK. And although he doesn't think the school will make it through, he said he wants the school's financial situation to change.
"I hope they fix it. That's what I hope," Rhodes said.
