On Monday we talked about Morris Brown College’s Chapter 11 bankruptcy filing in Atlanta.
The historically black college filed for bankruptcy last month to prevent the foreclosure of several pieces of property on its campus, including its administrative building. The college has more than $30 million in debts according to court documents and was facing foreclosure because of several bonds they accepted in 1996 that remain unpaid, which were secured to the properties.
At a prayer gathering last week following the announcement of the bankruptcy, the school’s attorney Renardo Hicks told the crowd not to fear the news. “I want to make sure everyone understands, there is no reason to fear the “B” word. There is no reason to fear bankruptcy,” Hicks said according to WABE-Atlanta. “The law requires that once you file a petition, you have about three months to actually file a plan, unless there’s reason to extend that period of time beyond that three months.”
Hicks was correct in telling the crowd not to fear the bankruptcy filings. Several major corporations have found success after Chapter 11 bankruptcies including General Motors, Chrysler, Texaco and Delta Airlines. Through filing Chapter 11 bankruptcy, Morris Brown College will remain in control of its finances with oversight from the court and retain control of its assets while working on a settlement for investors. Like Chapter 7 or Chapter 13 bankruptcies, Chapter 11 bankruptcy provides an automatic stay from creditors and stops foreclosures and lawsuits.
On Friday, we will discuss how the bankruptcy process works and how it stops foreclosure through an automatic stay. If you’re struggling financially, our Washington DC and Maryland bankruptcy attorney can help you with a free consultation by filling out the contact form on this website or by calling (202) 483-6070 to schedule an appointment. We can offer you the best solution for whatever your debt issues may be.
Law Firm of Kevin D. Judd– Maryland and Washington DC bankruptcy lawyer