Updated Wednesday, May 23, 2012 at 5:02 p.m. CDT
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,
Chief Restructuring Officer
Updated Wednesday, May 23, 2012 at 3:10 p.m. CDT
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.