JACKSONVILLE — Judge Bill Parker of the U.S. Bankruptcy Court in Tyler has ruled in favor of the Lon Morris College bankruptcy estate by giving interim approval for a $500,000 debtor-in-possession loan to help complete the sale of the school’s remaining assets. That’s according to KETK and a news release from the college. In addition, the bankruptcy court cleared the way for an asset auction in Dallas on Jan. 14, 2013, when the majority of the school’s campus will be sold. Parker denied attempts by the Texas Attorney General’s Office to prevent the bankruptcy estate from securing the debtor-in-possession loan, which will be used to cover insurance, utilities and similar expenses, in addition to paying the professionals who are working to increase the estate’s value.
“We are extremely pleased that the Court has approved this loan and cleared the way for what we believe will be a successful auction,” says Dawn Ragan, the chief restructuring officer for the school’s bankruptcy estate. “The loan approved [Wednesday] will help maximize the value of the estate as we work toward satisfying the school’s creditors, which include more than 100 former Lon Morris College employees who have not yet been paid for their work.”
“Today’s ruling means the bankruptcy court agrees with our position that this loan and the upcoming auction are the best options available to pay the college’s creditors by maximizing the value of the estate’s assets,” said Lon Morris attorney Hugh Ray III Wednesday. “Our goal is to make sure the creditors are paid what they’re owed, and everyone involved is working hard to make that happen.”