Lon Morris Updates: TAC Loan Obligation, December Auction, January Reunion
The Texas Annual Conference Council on Finance and Administration is recommending a loan agreement proposal from Heartspring Methodist Foundation that outlines terms for repayment of the guaranteed line of credit to Lon Morris College. The Texas Annual Conference will repay the loan of $1,026,260.29 (total as of July 2, 2012). This agreement outlines a twenty year term.
This recommendation, with the concurrence of the TAC Core Leadership Team will be presented at the 2013 Annual Conference for approval.
There have been a few changes in the plans for Lon Morris College, and the school is now scheduled to be auctioned off on December 13, 2012. The change in circumstance is due to the Department of Education revoking the school’s Title IV eligibility, based only on the fact the school was operating under the protection of the bankruptcy code. Loss of eligibility impacted the pool of buyers interested in the school, which now must sell just the physical assets.
AmeriBid, the auction company, will be holding the auction December 13th at the office of the debtor’s attorney, McKool Smith, in Dallas. Only qualified bidders will be allowed to attend.
Lon Morris has approximately 112 acres of real estate, including dorms, athletic fields and facilities, administration buildings and classrooms, as well as a library and a lovely chapel. Chief restructuring officer Dawn Ragan said they are trying to solicit interest in state institutions who may want to purchase the school in its entirety, as well as religious organizations who may want to acquire the chapel or other facilities. She noted they would like to hear from any interested constituents.
AmeriBid has set up different lots for bidding. Ragan noted one lot will be for the campus as a whole, and other lots will be established for specific other parcels, including one lot for the chapel. Bids will be taken for each package which could include physical property holdings and intellectual property rights such as the name and merchandising rights. Various mineral interests in Texas and other states will be auctioned separately. Lon Morris may also decide to accept a pre-emptive bid in advance of the auction, if they deem it advantageous to do so. Contact information is available at ameribid.com/contact.
Depending on the amount all assets are sold for, payrolls that were unpaid could be covered. Three payrolls were missed at more than $200,000 each. Generous donations to the Texas Annual Conference were enough to pay one of those payrolls, leaving two unpaid.
Ragan said “covering unpaid wages is a priority in the bankruptcy, senior to other unsecured debts - but only after certain secured debt is satisfied. We are negotiating with the senior lenders to ensure the priority wages can be paid.” The sale of the college can’t close until January due to the court schedule, which has to approve the sale. It would likely take another month beyond that approval to make distributions because of logistics.
Some recent articles in local area papers have speculated on supposedly “missing money” from a $1.3 million endowment given to Lon Morris by alumnus and Jacksonville native Dr. James D. Long. “The money was given primarily for the library, but also included a provision that the school could invest those funds as it saw fit,” Ragan added, “and since the money was earning less than 1% at the time, it is my understanding the decision was made to further invest in the school and ongoing improvements. The funds are not missing, but the question is whether they were spent appropriately. We are cooperating with the Attorney General’s office in their investigation, as well as conducting a parallel investigation ourselves.”
Many alumni have asked what will happen to their records if the school name were to disappear. Official transcripts can still be ordered by contacting Dr. John Ross at 903-589-4000, or via the website. In the future, that process will depend on who purchases the property.
If it is purchased by another educational institution, they will likely take on the records and responsibility of providing transcripts. Ragan said they have also discussed backup plans with Southwestern University for all transcript data to be sent to and maintained by them if Lon Morris is purchased by some other type of entity. A final determination will be made and announced once the purchase is completed.
A brief service of de-consecration was held at the Lon Morris chapel on Sunday, November 4. It was a small, quiet service with only a few in attendance including trustees. Former president Faulk Landrum and Dr. Jimmie Reese, who served as chaplain when the chapel was originally consecrated were present at the ceremony.
There will be a “Service of Celebration of the Life and Ministry of Lon Morris College” on Saturday, January 26 at 10:00 a.m. at FUMC, Jacksonville, with a reception to follow in the fellowship hall. Bishop Huie will preside and everyone is invited.
This will be Lon Morris’ last “homecoming,” and classes are encouraged to organize their own reunions if they wish to do so. Keith Jenkins, one of the former chaplains, has offered to put together a slide presentation of pictures to be submitted by alumni. Lon Morris will also make available the balance of its branded merchandise that weekend, for a donation to be designated to go towards the unpaid employee payrolls.