Party on the Titanic (real estate, credit, loan)

[MathmanMathman]

Morris Brown is celebrating Homecoming…with no football team…35 students… alumni cheerleaders..and a Homecoming Queen

Despite Morris Brown

The AJC gives the debt at $35 million which could be an increase from earlier reports.

Originally Posted by ajc

Bankruptcy papers show administrators, faculty and staff haven’t been paid for several months — yet they still come to work. Students, only 13 of whom live on campus in two single-sex dorms, pay $4,100 for tuition and an additional $4,200 if they get room and board — yet they mow the lawns on the second Saturday of every month.

A far better question than the HBCU price tags at Morehouse, Spelman, and CAU is why are these students paying that much money for an unaccredited degree at a school on life support?.

Originally Posted by ajc

Dickens (Florida A&M University Economist) said using what scant resources are available to barely keep Morris Brown open is “subsidizing failure.” He said the time has come for the school and the AME church to make some tough decisions.

“At the end of the day, when bills are not paid and faculty is working pro-bono, you have to come to the conclusion that it is time to pull the plug,” Dickens said. “Any financial metric that one uses to appraise the viability of an institution would conclude that Morris Brown has outlived its economic usefulness and should close.”

The bankruptcy hearing will be very interesting. Morris Brown doesn’t appear to have a steady income stream, owes hundreds of thousands in utilities, owes $13 million in bonds, and owes a huge sum in back pay to its employees. Even if the judge slashes the school’s debt, would it still have to sell off most of its real estate as it simply can’t support all those facilities.

[arjay57]

I hate to hear that because Morris Brown has a great history.

At the same time, colleges do fail, just like any other venture. Morris Brown would hardly be the first not will it be the last that has to close its doors, merge with another institution or do some other major restructuring.

There's a business side to running a college and if your product isn't selling -- despite decades of propping it up -- then sometimes you have to face the handwriting on the wall.

Years ago we had a little company and despite everything we tried it just wasn't making it. So I went to a banker I'd known for a long time to beg for another loan, but he turned me down. His advice was very wise and I have never forgotten it. "Arjay," he said, "this bank has been in business over 100 years and one thing we have learned is this. Not every business is going to make it, and once the downward spiral begins it rarely helps anyone to keep pouring money into a losing proposition. It's better to cut your losses and everybody else's and put your energy into something else."

So while I'm a great believer in giving things your best shot, at some point you have to find the courage to say "Enough, this isn't working." That can take even more guts and smarts than plowing blindly ahead.

[MathmanMathman]

I hope the judge says something like that. If it was most any other institution the judge would deny Chapter 11 and make it Chapter 7 in order to liquidate the campus as it clearly is no longer financially viable. But being an HBCU that might put some political pressure on the judge to do everything in Morris Brown's favor as possible.

Really, given the AUC's financial problems, it would be irresponsible to give any money to Morris Brown. Any monetary gifts are better directed toward CAU, Morehouse, and Spelman.

[gtcorndog]

Don't you know that you can't provide accurate criticism of a HBCU!

[arjay57]

I just did.

[MathmanMathman]

Originally Posted by gtcorndog

Don't you know that you can't provide accurate criticism of a HBCU!

I probably should have said "former HBCU". Arguably, without accreditation, Morris Brown is no longer one.

[arjay57]

There's no question Morris Brown has had loads of problems and its day has almost surely come and gone. However, it seems to me they are get picked on in ways that a non-HBCU probably wouldn't.

[MathmanMathman]

Originally Posted by arjay57

There's no question Morris Brown has had loads of problems and its day has almost surely come and gone. However, it seems to me they are get picked on in ways that a non-HBCU probably wouldn't.

Probably because they insist on hanging around. Any non-HBCU would have closed or merged with another school a long time ago. Morris Brown seems content to accept below mediocrity.

[arjay57]

Originally Posted by MathmanMathman

Probably because they insist on hanging around. Any non-HBCU would have closed or merged with another school a long time ago. Morris Brown seems content to accept below mediocrity.

Well, my point is, why do any of us care? We're not attending Morris Brown or sending our kids there.

If it was a non-HBCU I doubt that it would be a source of very much comment.

[MathmanMathman]

Originally Posted by arjay57

Well, my point is, why do any of us care? We're not attending Morris Brown or sending our kids there.

If it was a non-HBCU I doubt that it would be a source of very much comment.

I don't think so. We comment on a lot of things here that won't impact us. Besides, it makes the AJC as news periodically so they're fair game. Life College was in a similar predicament about 10 years ago and it made the news too, but they got back on track.