(KYTX) - New developments on Lon Morris College's bankruptcy situation.
An emergency hearing was held Thursday afternoon in a federal bankruptcy court in Smith County.
The college filed for chapter 11 bankruptcy, which would allow Lon Morris leaders to keep control of the college, but only under court supervision.
The judge approved the college to use a $750,000 debt loan on an interim basis.
The money will be used to keep the school going through the summer. The money will also help market the college around the area as they try to attract students and potential financial partners.
The judge also allowed the school to pay a deposit of $10,514 to it's utility companies.
Lon Morris owes thousands of dollars in overdue utility bills. The judge signed an order that will keep the utility companies from disconnecting any services.
Dawn Ragan, Chief Restructuring Officer, with Bridgepoint Consulting was also approved by the judge to continue leading the school after filing for bankruptcy.
In court, Ragan and Lon Morris lawyers painted the school as a historical Jacksonville institution that had fallen on hard times as it tried to increase its student population over the years.
The judge's decision will allow Capstone Partners to be the school's financial advisor and investment banker. Capstone will lead the search for an educational institution for the school to partner with and help them out financially in the future.
Representatives for Lon Morris will be back in court in three weeks.
On Monday, Lon Morris voluntarily filled for chapter 11 bankruptcy after learning some of its dorms were entering foreclosure.
