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Morris Brown in Grips of Financial, Legal Crises

Posted on: Monday, 17 April 2006, 21:00 CDT

By Andrea Jones, The Atlanta Journal-Constitution

Apr. 17--In the three years since Morris Brown College lost its accreditation and federal funding, enrollment has plummeted, lawsuits have piled up and two presidents have resigned.

On Tuesday, jury selection is scheduled to begin in a trial of two administrators federal officials say were responsible for the final financial breakdown of the cash-strapped college. They will be tried in federal court on charges that they defrauded the government, the school and its students.

But regardless of whether former president Dolores Cross or financial aid director Parvesh Singh is found guilty, the school continues to face a huge uphill battle to keep its doors open. While it is certainly not the first time the college has faced dire financial problems in its 121- year history, this time could be the most serious.

In addition to civil lawsuits filed by former and current students, Morris Brown faces a civil suit for defaulting on a $13 million property bond --- a case that eventually could lead to foreclosure on some of the college's most historic buildings, including its administration building, attorneys involved in the case say.

The complaint asks for $10.7 million in principal owed on the loan agreement, $1.5 million in interest and a per diem of $2,100 for each day Morris Brown doesn't pay.

If a judge decides Morris Brown owes the debt and the school can not pay, it could face a variety of enforcement options, including the liquidation of certain assets, said Gregory Worthy, a lawyer who represents the banking association and trustee in the case.

Getchel Caldwell, Morris Brown's vice president for institutional advancement, said the college has been focusing on the upcoming criminal trial and continues to weigh its options in the civil cases.

College officials have said the school plans to re-apply for accreditation later this year, a lengthy process that would require the college to be debt-free.

Morris Brown, which has an enrollment of just 44 students, lost its accreditation in 2003 and has continued to operate as a scaled-down version of its former self.

Students are no longer eligible for state or federal aid, and the college is still deeply in debt. It offers three degree programs and employs just nine faculty members.

Just last week, a group of current students filed suit against the college's board of trustees, asking a judge to remove them for breach of fiduciary duty.

"We are trying to save Morris Brown," said Alexander Hamilton, a Washington-based lawyer and Morris Brown alum who represents the students.

Cross and Singh were charged in December 2004 in a 34-count indictment that accused them of defrauding the school, the U.S. Department of Education and hundreds of students. The pair, who first worked together at a college in Chicago, stand accused of using the names of hundreds of unwitting students to obtain financial aid for the school. From August 1999 through January 2002, Singh obtained about 1,800 payments from federally insured loans and Pell grants for these students, who had no idea they would be responsible for paying off the loans, the indictment said.

Both were released on $50,000 bond. At the time, the judge agreed to allow Cross, who lives in Chicago, to take an international trip during the holidays before surrendering her passport and Singh, who lives in Indiana, to get medical care in San Diego.

Cross' lawyer, Drew Findling, said Wednesday, "Dr. Cross has long awaited the trial and looks forward to defending herself in a court of law." Findling added that "given the technical nature of the case, we believe it would be improper for any party to discuss the specific issues to be addressed at trial."

Singh's lawyer, Ed Garland, has said in the past that Singh was a scapegoat who encountered "mess and chaos" in the financial aid office when he came to work at Morris Brown in 1998.

He said Wednesday that his client is in extremely poor health and has had a kidney transplant and triple bypass surgery. He also has diabetes and vascular problems.

"It appears to me that my client is absolutely innocent and at the conclusion of this trial the prosecution will realize this case never should have been brought against either" [Singh or Cross], Garland said.

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Source: The Atlanta Journal and Constitution

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