By Jordan Meadows
Staff Writer
Saint Augustine's University will not offer any classes or educational programs this fall, the historically Black Raleigh institution's attorney told a federal bankruptcy court last Thursday, as the school abandons plans to launch online certificate programs intended to generate revenue during its Chapter 11 reorganization.
The university filed for bankruptcy in April, citing $74 million in debt, and ended its years-long fight to retain accreditation at the same time. Officials had said the school would not close but would pivot toward online certificate and noncredit programs in subjects including artificial intelligence, programming, data analytics, Python, Java, biotechnology and public health—priced between $1,100 and $4,500.
The university had already written course syllabi, hired instructors and begun marketing the programs before the reversal.
Rogers told Judge David Warren that the board had decided the university's limited resources were better spent stabilizing its finances than launching new offerings.
"At this time, the university is not going to be offering any educational offerings, whether they be certification programs or internships, etc.," Rogers said. "We feel that the debtors' best efforts should be focused on emerging as a new and stronger entity on the other side of this bankruptcy, and the board has agreed to and is looking forward to solely focusing its efforts on that."
She told the court the programs would have generated little revenue in any case.
Pausing the programs would also help the university reduce payroll and other expenditures at a time when it is surviving on borrowed money from Self-Help Ventures Fund—more than $1 million so far—and spending nearly $300,000 a month.
Bankruptcy administrator Brian Behr backed the decision, calling it one of several "significant positive developments" and noting the online programs would have required the university to spend on personnel it could not spare while working to repay creditors.
"This board is having to deal with a lot, and its first priority needs to be exiting bankruptcy as quickly as possible," Behr said.
Earlier in the case, Judge Warren had raised his own doubts about the university's ability to deliver on promises to prospective students, at one point describing the institution as "essentially closed."
Even as it pulls back academically, the university is exploring options for its real estate. Saint Augustine's has applied to hire the firm Avison Young to advise on selling portions of its roughly 105-acre campus, valued at approximately $200 million; court filings show Avison Young would receive a $50,000 retainer plus a percentage of any sale, capped at $7.5 million. A Self-Help Ventures Fund official indicated in court the nonprofit plans to object to that hire, which could complicate matters since the court must approve it.
Behr said he hoped the university could avoid a "wholesale sale of property" but acknowledged the option needed to remain available.
"I don't think that's necessarily in the best interest of the debtor, at least currently," he said. "But the debtor likely does need to have that on the back burner as a possibility if everything were to fall apart."
The university had previously pursued a $70 million, 99-year lease of its campus to a Florida developer, but that deal collapsed after state officials declined to approve it over concerns including the university's ability to continue operating.
Judge Warren spoke sympathetically about the university's position as it works to reorganize.
"It's very hard, especially when you've got a company or a university that is essentially closed and you're trying to chart a new course and reorganize," Warren said. "I respect the time and effort that the board is putting into this, as well as the professionals. It's not easy, and so I just hope that those persons involved will stay in there, hang in there and see if we can't get to the end of this."
The university is scheduled to return to court Thursday.
