Morris Brown College, a 131-year-old historic black college based in Atlanta, has filed for Chapter 11 bankruptcy in order to prevent its property from being foreclosed upon and sold at auction on Sept. 4.
The Atlanta Journal-Constitution reports that the college has more than $30 million in debt and was on track for foreclosure after investors called $13 million worth of 1996-issued bonds that were tied to the college. Several pieces of college property, including the school's administration building, were used for collateral.
‘The trustees are taking several deliberate actions to insure that we not only survive, but thrive,’ says Preston W. Williams, the college's chairman of the board. ‘Our commitment is to focus on restructuring and making it possible for us to survive another day.’
The college, which was founded by freed slaves in 1881 and is affiliated with the African Methodist Episcopal Church, has faced significant challenges in the past decade. In 2002, the Southern Association of Colleges and Schools revoked its accreditation following a scandal related to financial problems; the United Negro College Fund also withdrew its support for the school. Attendance has seesawed over the past 10 years, and the college had its municipal water connection turned off December 2008 due to nonpayment on its water bill; service was later resumed when the debt was settled.
(Photo courtesy of the Library of Congress)