Lon Morris College estate asks court to OK pay for employees before holidays

TYLER (TYLER MORNING TELEGRAPH) – Representatives of the Lon Morris College bankruptcy estate are asking a federal judge to approve a pre-holiday distribution of $130,000 for former employees who were not paid during the final weeks before the school closed in May.

The 158-year-old Methodist college, Texas' oldest junior college, filed for bankruptcy protection earlier this year. The bankruptcy estate is represented by Houston lawyer Hugh Ray III of McKool Smith. The estate's chief restructuring officer is Dawn Ragan of Bridgepoint Consulting in Dallas.
In the emergency motion filed Dec. 12 before the Hon. Bill Parker in the U.S. Bankruptcy Court for the Eastern District of Texas, Ms. Ragan and Mr. Ray are requesting a hearing to present evidence for why the group of 138 former Lon Morris employees should be allowed to receive the cash disbursements. The same employees previously received approximately $200,000 in humanitarian donations requested by the bishop of the Texas Annual Conference of the United Methodist Church.

"We're hoping the court will allow us to distribute these funds before the holidays as we continue to work to increase the value of the estate and make sure workers are paid all the wages they're owed," says Ms. Ragan. "These men and women missed three payroll periods covering six weeks of work because they supported Lon Morris' Christian charitable mission to provide education for young people. We believe they deserve this payment."

The emergency motion details a prior financial endowment provided by Lon Morris College in the late 1960s to the Nashville-based United Methodist Higher Education Foundation (UMHEF). According to the filing, the endowment fund grew to nearly $1 million, but neither Lon Morris nor UMHEF maintained sufficient documentation to show specifically how the fund should be distributed.

In a resolution negotiated by Ms. Ragan and Mr. Ray with UMHEF officials, the Lon Morris estate and UMHEF have agreed to resolve any differences over the endowment fund by allowing UMHEF to provide the $130,000 payment for former Lon Morris employees and $7,000 for expenses related to the agreement.

"Given the lack of documentation from prior administrations at both Lon Morris and UMHEF, this is absolutely the best resolution for the former employees and the school's estate," says Mr. Ray. "We have one Christian charity saying that it wants to make sure the employees of another Christian charity are paid for their work in carrying out the charities' shared mission, and I truly believe this request should be honored."

The recent motion does not impact a scheduled auction of Lon Morris assets set for Jan. 14 in Dallas. The auction will include approximately 50,000 square feet of academic lecture halls, dormitory buildings, a technology center, a gymnasium, and fields for football, baseball and other sports. A detailed auction listing is online at http://www.ameribid.com/upcoming-auctions/auction-detail/?id=192730.

Tulsa, Oklahoma-based AmeriBid is coordinating the auction based on prior approval by the bankruptcy court.


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