A newly-announced $20 million plan could help Atlanta's Morris Brown College reorganize and stay in operation. The college filed for bankruptcy a month ago and recently submitted the plan to bankruptcy court. School officials say they think the plan could help the college settle some of its debts while still keeping most of the campus in one piece.
According to the court filings, the plan includes setting aside $5 million to donate to the school after it is out of bankruptcy. Another $7.5 million would be put toward paying off creditors and another $7.5 would be paid to bond holders who control some of the college's assets.
The plan was submitted just weeks after college trustees turned down an offer of close to $10 million in taxpayer money.
The taxpayer money was offered as a plan by the Atlanta mayor, who said the city supports the alternative plan if the school thinks "it is in their best interest." Although, he said that he continues to believe that the plan offered by the city "was the better alternative."
The school's plan includes receiving money from North Carolina-based FD LLC, the owner of the Family Dollar discount chain. The plan also involves leasing out school property, including Herndon Stadium, which was used in the 1996 Olympics. The school's vice chairman of the board of trustees did not elaborate any further on the plan.
The school, which was founded in 1881, currently lacks steady cash flow and is $35 million in debt. At one time, the college had 3,000 students enrolled but today only 35 students are enrolled.
Reorganization is one way that a struggling business or individual can have a fresh start and creditors can be paid off. However, the plan must be approved by the bankruptcy court overseeing the bankruptcy.
Source: NorthJersey.com, "Morris Brown submits plan to bankruptcy court," July 2, 2013; Atlanta CBS Local, "Morris Brown’s $20 Million Plan," July 2, 2013