Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, January 7, 1992 TAG: 9201070201
SECTION: VIRGINIA PAGE: B-3 EDITION: METRO
SOURCE: Associated Press
DATELINE: LYNCHBURG LENGTH: Medium
LIBERTY U. NOT BANKRUPT, FALWELL SAYS
Liberty University is turning a profit and is in no danger of heading into bankruptcy court, the Rev. Jerry Falwell said."Liberty is not closing down," he said. "We'll be here this year and we'll be here next year."
The assurance came two weeks after Falwell wrote in a fund-raising letter that the school could be days away from filing for protection from creditors.
"Our attorneys have given me permission to advise you that Liberty University could be forced to file for Chapter 11 bankruptcy in the next few days," the letter to potential donors said. "They also gave me permission to tell you why this tragic thing is imminent. . . . There is still time to save this Christian university from foreclosure and bankruptcy."
Falwell, the chancellor, said Liberty was seeking "a $10 million miracle" from donations.
A second letter has been sent telling donors that bankruptcy is not imminent, Falwell said.
"We never had any intention of filing for bankruptcy," Falwell told The News & Advance of Lynchburg. "We said [in the letter] if we can't obtain financing we could be imperiled that way. We never implied anywhere any imminence of bankruptcy.
Donors have been responding "very heavily" and the school hopes to raise the $10 million by the end of January, Falwell said.
The first letter detailed the problems Liberty has experienced since Kemper Securities Group Inc. withdrew from a $61 million bond issue Liberty expected Kemper to underwrite in November 1990.
Liberty and Kemper are involved in private arbitration in Boston, with the school seeking $61 million as well as damages.
Falwell said Liberty is much more financially stable than it was a month ago. Liberty recently got off probation by its accrediting agency and was found in compliance with tax codes by the IRS, according to the school.
The school has asked its creditors to agree to a plan that would have them refinance Liberty's debt.
Falwell said Liberty has asked major creditors to change short-term debt into long-term debt in case the school can't get financing from the investment firm with whom it has been negotiating. He said creditors who have responded so far have agreed to the arrangement.
Liberty has about $60 million worth of debt, much of which has come due in the past two years while the school unsuccessfully sought refinancing from numerous financial institutions.
Falwell said the school is operating in the black, with "current revenues exceeding our current operational expenses by millions of dollars."