Posted 11:01 pm Saturday, October 06, 2012
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Request filed with bankruptcy court; hearing set for October 31
By Kelly Gooch
kgooch@tylerpaper.com
The oldest two-year junior college in Texas will cease to exist as it once was if its buildings and personal property are auctioned off later this year.
kgooch@tylerpaper.com
The oldest two-year junior college in Texas will cease to exist as it once was if its buildings and personal property are auctioned off later this year.
Lon Morris College, which has faced serious financial struggles in recent years, filed an application Sept. 28 in the United States Bankruptcy Court Eastern District of Texas, requesting the authority to employ Tranzon Auction Resolutions, who will sell “a substantial amount of the real property” of the Jacksonville estate.
According to the application, Tranzon would market and sell the real property, and certain personal property. Auctioning should be accomplished, the application states, through an agreement of at least two of the major secured creditors “agreeing to a cash auction of real estate by public auction free and clear of liens, claims, charges, encumbrances and interests.”
Lon Morris has an estimated 112 acres of real estate with various buildings such as dorms, class buildings, athletic facilities, administration buildings, a library, a chapel, and admission buildings, according to the application. Dr. Jack Nelson, who has served as Lon Morris’ board vice president, said these buildings can be sold to pay creditors as well as former employees.
Capstone Partners, which the school previously hired to facilitate an agreement with an educational and financial partner, has suspended its efforts, though there was interest, according to the application, partly because Lon Morris lost Title IV eligibility.
In August, the college learned it will lose federal student aid and subsequently decided to suspend the fall semester.
Lon Morris and Tranzon propose to auction property on or around Nov. 15, Lon Morris’ application states. According to the application, Nov. 13 is the proposed sealed bid deadline for real property with a subsequent live auction on Nov. 15 if necessary. Personal property will be part of the sealed bid auction, according to the application.
“Lon Morris believes, in the exercise of its business judgment, that the proposed sale of the property will generate the most value for the benefit of the creditors of the estate with the least amount of risk of further diminution of the value of the estate,” attorneys write in the application. “The alternative is to list the property with a broker, a process that could take months, if not longer, and has no greater assurance of generating a sale.”
According to the application, Tranzon would market and sell the real property, and certain personal property. Auctioning should be accomplished, the application states, through an agreement of at least two of the major secured creditors “agreeing to a cash auction of real estate by public auction free and clear of liens, claims, charges, encumbrances and interests.”
Lon Morris has an estimated 112 acres of real estate with various buildings such as dorms, class buildings, athletic facilities, administration buildings, a library, a chapel, and admission buildings, according to the application. Dr. Jack Nelson, who has served as Lon Morris’ board vice president, said these buildings can be sold to pay creditors as well as former employees.
Capstone Partners, which the school previously hired to facilitate an agreement with an educational and financial partner, has suspended its efforts, though there was interest, according to the application, partly because Lon Morris lost Title IV eligibility.
In August, the college learned it will lose federal student aid and subsequently decided to suspend the fall semester.
Lon Morris and Tranzon propose to auction property on or around Nov. 15, Lon Morris’ application states. According to the application, Nov. 13 is the proposed sealed bid deadline for real property with a subsequent live auction on Nov. 15 if necessary. Personal property will be part of the sealed bid auction, according to the application.
“Lon Morris believes, in the exercise of its business judgment, that the proposed sale of the property will generate the most value for the benefit of the creditors of the estate with the least amount of risk of further diminution of the value of the estate,” attorneys write in the application. “The alternative is to list the property with a broker, a process that could take months, if not longer, and has no greater assurance of generating a sale.”
Nelson, who attended the college in the early ’60s, said Lon Morris would love somebody to come in and buy it outright, but that has not happened, and there are people who are owed money.
He said Lon Morris has made a small income through selling vehicles, but as he understands it, that was used to keep the doors open and have people there to respond to transcript requests and check on the facilities.
A hearing is scheduled for Oct. 31, at which time the judge could make a decision on the college’s request.
In the meantime, former Lon Morris students said they have fond memories of the school and are sad to see it struggle.
Navoleine Roddy, 90, attended the school in 1939 and 1940.
“At that time, it was very well-known and a good little junior college,” she said, adding that her two sisters also attended the school.
“I just followed it through the years as it functioned, and I was so sorry to hear the problems it was having.”
She said she specifically remembers the president when she was a student there, and took a lot of physical education because she was going to minor in that. She still has an old yearbook and sometimes hears about or sees some of the students who were there when she was.
“It hurts me to see it in the condition it’s in now and have wondered what could have been done to keep them from getting to that point,” she said.
Nelson played on the 1962 Bearcats basketball team, which reached the national championship game, and had a reunion with former teammates earlier this year.
He said Lon Morris has made a small income through selling vehicles, but as he understands it, that was used to keep the doors open and have people there to respond to transcript requests and check on the facilities.
A hearing is scheduled for Oct. 31, at which time the judge could make a decision on the college’s request.
In the meantime, former Lon Morris students said they have fond memories of the school and are sad to see it struggle.
Navoleine Roddy, 90, attended the school in 1939 and 1940.
“At that time, it was very well-known and a good little junior college,” she said, adding that her two sisters also attended the school.
“I just followed it through the years as it functioned, and I was so sorry to hear the problems it was having.”
She said she specifically remembers the president when she was a student there, and took a lot of physical education because she was going to minor in that. She still has an old yearbook and sometimes hears about or sees some of the students who were there when she was.
“It hurts me to see it in the condition it’s in now and have wondered what could have been done to keep them from getting to that point,” she said.
Nelson played on the 1962 Bearcats basketball team, which reached the national championship game, and had a reunion with former teammates earlier this year.
“We told everyone then we were struggling (and that) we’re just going to have to take a day at a time, and we just ran out of money,’ he said. “It’s sad.”
He said it’s also difficult for a small, private institution to make it because graduates have other loyalties, such as their senior colleges, and without that support, it’s hard to compete with colleges that get state and local tax money.
“Any facility you decide you want to build, you have to raise that money, so it’s ongoing pain to try to raise money to keep facilities going…,” Nelson said. “We didn’t lose, we just ran out of time.”
But he said he still thinks fondly of Lon Morris and the successful alumni it produced.
“It was a special time,” he said.
Last week’s request is one of the latest issues in the Lon Morris bankruptcy case.
He said it’s also difficult for a small, private institution to make it because graduates have other loyalties, such as their senior colleges, and without that support, it’s hard to compete with colleges that get state and local tax money.
“Any facility you decide you want to build, you have to raise that money, so it’s ongoing pain to try to raise money to keep facilities going…,” Nelson said. “We didn’t lose, we just ran out of time.”
But he said he still thinks fondly of Lon Morris and the successful alumni it produced.
“It was a special time,” he said.
Last week’s request is one of the latest issues in the Lon Morris bankruptcy case.
Lon Morris filed a voluntary chapter 11 bankruptcy petition in July after bleeding millions of dollars since at least the 2007-08 school year, when college representatives say the school embarked on a costly plan to grow enrollment.
About 100 students were expected to attend Lon Morris this fall, and now other East Texas community colleges have stepped in to help accommodate them.
Joe Angle, whose firm represents the city of Jacksonville, said the Lon Morris real estate could still be purchased by an educational institution or another buyer, provided that the bankruptcy court authorizes Lon Morris to go through the auctioning process as it requested. The city is still trying to get back the rodeo grounds that it donated to Lon Morris.
About 100 students were expected to attend Lon Morris this fall, and now other East Texas community colleges have stepped in to help accommodate them.
Joe Angle, whose firm represents the city of Jacksonville, said the Lon Morris real estate could still be purchased by an educational institution or another buyer, provided that the bankruptcy court authorizes Lon Morris to go through the auctioning process as it requested. The city is still trying to get back the rodeo grounds that it donated to Lon Morris.
