By Cash Michaels
Contributing Writer
Just when many thought that St. Augustine’s University (SAU) in Raleigh was well on the road to overcoming its problems, comes word that the private Episcopalian HBCU has filed for Chapter 11 bankruptcy protection to address its massive debt. Doing so, SAU’s Board of Trustees said in an announcement, is a “deliberate and strategic step to advance the University’s long-term sustainability while addressing current financial realities.”
According to the Chapter 11 filing last week in federal court, SAU had $50 million to $100 million in financial liabilities to 345 creditors, with assets between $100 million and $500 million.
SAU’s largest single debt is $14 million to the Internal Revenue Service, along with millions owed to several other federal agencies and private vendors. The school is disputing its top 20 creditors, and they have until August 25th to prove their claims.
In doing so, the Self-Help Ventures Fund, a nonprofit group that helps underserved communities with financing challenges, agreed to loan SAU millions to meet many of its obligations, provided the school cut ties with two of its board members who previously served as chairman and vice chairman.
But in the process, the school must give up its legal battle to retain its eligibility for permanent accreditation for now, the very thing it needs to remain a viable, competitive educational institution.Without accreditation, SAU cannot receive federal student financial aid.
Instead, SAU has announced that it will implement teach-out agreements for current students to finish their studies at other schools. That, along with non-degree nursing and technical certificates, and apprenticeship programs.
The SAU Board of Trustees calls attempt to keep the school open “a new path forward” and “building a pathway toward accreditation.”
SAU’s Interim President Dr. Jennie Ward-Robinson has resigned, and Dr. Verjanis A. Peoples has taken her place.
In a statement, SAU said, “SAU will work collaboratively with stakeholders, including creditors, donors, alumni, and community partners, to provide meaningful opportunities for supporters of the institution to contribute and play an active role in its continued progress and success.”
“These steps position the University to move forward with clarity and purpose, continuing its mission of preparing students academically, socially, and spiritually for leadership in a complex, diverse, and rapidly changing world.”
