Morris Brown College won a victory Wednesday in its long road out of bankruptcy after a federal judge approved a sale of its land interests.The college’s $14.5 million sale to Invest Atlanta, the city’s development authority, and Friendship Baptist Church hinges on a contested 17-acre portion of the 37-acre land deal.
Clark Atlanta University objected to the sale, saying the land is subject to a decades-old agreement between the schools to use it for educational purposes.
U.S. Bankruptcy Court Judge Barbara Ellis-Munro ruled that Morris Brown could sell its interests in the land without voiding its original agreement with Clark Atlanta. But she said Clark Atlanta could pursue additional litigation — in state courts — to determine what those interests are.
Morris Brown can go ahead and sell the “interests” it has, but they remain undefined.
“We are working with the buyers to finalize documentation,” said Anne Aaronson, Morris Brown’s attorney. “Closing remains scheduled for Monday.”
Atlanta Mayor Kasim Reed said the city will now move forward with closing on the deal with a Thursday vote. Reed said Morris Brown is a “strategic asset” because of its proximity to the Atlanta University Center, neighboring communities and stadium-related development.
Under the proposed plan, Invest Atlanta would pay $10.6 million. Friendship Baptist, one of the churches forced to relocate due to the Falcons stadium deal, would add almost $4 million.
“I want to make sure it is in the hands of the city so that we have public input and involvement as we develop that important parcel about 300 to 400 yards away from a $1.3 billion investment in the new Falcons stadium,” Reed said.
Clark Atlanta claimed during previous court sessions that if Morris Brown sold the land without its approval, then the land would revert to Clark Atlanta. It also said it would sue in order to determine those interests.
Morris Brown said the disputed land would continue to be used by the college under a lease agreement with Invest Atlanta.
It argued that Clark Atlanta’s interest in the property wouldn’t be infringed because the land would still be used for educational purposes, even if its ownership had changed.
Morris Brown filed for bankruptcy in 2012, reporting that it was $30 million in debt. The vast majority of that debt was owed to the African Methodist Episcopal Church, which is still owed $18.6 million.
The AME Church objected to the sale initially, saying it needed time to examine whether the payout would be enough for Morris Brown to pay back its debts. It withdrew that complaint, however, after reviewing the deal.
“The next step for the AME Church is to let the sale close,” said J. Robert Williamson, the church’s attorney, “and then try to negotiate a resolution of the (remaining debt).”
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