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August 30, 2012

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Morris Brown College
Morris Brown College

Morris Brown College Files for Chapter 11 Bankruptcy

by Frederick H. Lowe
Morris Brown College, a Historically Black College, founded by the African Methodist Episcopal Church, has filed for Chapter 11 Bankruptcy, citing debts of $10 million to $50 million and assets equal to that amount, according to court documents obtained by The NorthStar News & Analysis.

In a U.S. Bankrutpcy Court petition filed in Atlanta, Dr. Stanley Pritchett, Morris Brown’s president, listed the school’s 20 largest unsecured creditors. They included the Woodruff Library in Atlanta, Georgia Power, which is also based in Atlanta, and the City of Atlanta’s Department of Water Shed Management. In the petition, the school said it had 200 to 999 creditors.

Some of the largest unsecured debts range from a high of $2.4 million for the Wooddruff Library to a low of $55,843.75 for Georgia Natural Gas. The school also owes $13 million in bond debt. The Fulton County Development Authority issued the bonds in 1996.

Chapter 11 usually results in reorganization of the debtor's business or personal assets and debts, but it can also be used as a mechanism for liquidation. An auction is scheduled for September 4 to sell the school’s assets. A rally and prayer vigil have been held to save the school, but it is not clear if that will be enough to save the school, which has only 50 students.

At one time, Morris Brown has been one of the colleges that comprised the Atlanta University Center. The other schools are Morehouse College, Clark Atlanta University and Spellman College.

The school has been on the brink of financial collapse since 2003, when the Southern  Association of Colleges withdrew its accreditation and as a result the United Negro College Fund stopped giving financial support to Morris Brown.

In 2006, Dolores Cross, who served as Morris Brown’s president from 1998 to 2002, pled guilty to embezzling federal funds by applying for money on behalf of students without their knowledge.  Cross used the money to pay the school’s operating expenses.

The government ordered Cross, who had been president of Chicago State University, to pay $13,942 in restitution.She was sentenced to five-years probation.

Parvesh Singh, the school’s financial aid director under Cross at Morris Brown, also pled guilty.

Morris Brown is a private college founded in 1881.

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