A federal bankruptcy judge on Thursday delayed for another week a judgment on the sale of cash-strapped Morris Brown College.
The historically black college’s proposed $14.6 million sale of most of its property to Invest Atlanta and Friendship Baptist Church was put off until Wednesday after it could not reach an agreement with Clark Atlanta University. Both buyers and Morris Brown will get a portion of the campus property in the sale.
Clark Atlanta filed an objection last month, contending that Morris Brown does not have the right to sell a portion of its 37 acre campus. In a decades-old agreement, Clark Atlanta gifted 17 acres of land to Morris Brown on the condition it be used for educational purposes.
Under the deal, Clark Atlanta argues that Morris Brown can’t sell the property, which would be owned by Invest Atlanta, without its approval.
“They cannot seek, through this sale, to increase what rights they have to the property,” said David Wender, Clark Atlanta’s attorney.
Morris Brown’s attorneys contend that Clark Atlanta’s rights would not be violated because the college would continue to operate as an educational institution on the land under a lease agreement with Invest Atlanta.
“It’s a requirement for closure,” Morris Brown attorney Anne Aaronson said.
Morris Brown filed for bankruptcy in 2012, facing debts of about $30 million. The college has said the land sale would allow it to pay off its debts, continue educating students and ultimately regain its accreditation.
The African Methodist Episcopal Church, dropped its objection to the sale Thursday. As Morris Brown’s largest creditor, the AME Church was initially concerned that the $14.6 million offer wouldn’t be enough to cover the $18.6 million it was owed from the school.
“We have not forgiven the debt,” said J. Robert Williamson, the AME Church’s attorney. “If the sale closes, our liens will attach to that money.”
Both sides plan to work out a plan for repayment once the deal closes.
The proposed sale permits Morris Brown to maintain about six-and-a-half acres to continue its operations, including the administration building, while serving as many as 75 projected students this fall.
If the judge approves the sale next week, the Invest Atlanta board would vote on the deal the following day. Closing has been set for June 23.
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