Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, January 30, 1995 TAG: 9501300078
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: CODY LOWE STAFF WRITER
DATELINE: LENGTH: Medium
Through their Christian Heritage Foundation, two longtime supporters of the Lynchburg university had been buying up chunks of Liberty's debt for the past couple of years, according to Liberty spokesman Mark DeMoss.
The two businessmen, Dan Reeber and Jim Thomas, had not been collecting any payments and previously had expressed their intention to forgive the money, but the release from the indebtedness did not become official until Saturday.
Liberty Chancellor and founder Jerry Falwell publicly announced the action during Sunday's services at Thomas Road Baptist Church.
DeMoss, contacted at home Sunday, said he could not be more specific about the dollar amount of the gift, which Falwell characterized as between $30 million and $40 million.
Falwell said Reeber and Thomas continue to hold $700,000 in debt that they cannot forgive until they repay the money they borrowed to obtain it.
Saturday marked ``the greatest single day of financial advantage'' in the university's history, Falwell told his home church and a national television audience in a live broadcast.
The university's debt now is less than $40 million, most of it owed to three creditors: a group of bondholders, an insurance company and a bank. That amount ``is not only reasonable but manageable,'' DeMoss said.
``We're not going on any big spending programs,'' he said, but the university's directors now believe the school's financial situation is under control.
DeMoss said the university has cut or controlled expenses, raised per-student revenue and drawn increased applications for enrollment over last year.
``We are really encouraged.''
It is the board's ``intention to have the remaining debt, if not eliminated, in the hands of a very small number of people in the next two years,'' DeMoss said.
The board of directors ``is not opposed to having some debt, as long as it is being serviced. Two years ago, we could not and were not serving our debt.''
In mid-1992, Liberty attempted to force creditors who were owed about $80 million to accept a seven-year debt-restructuring plan. That plan would have stopped interest accumulation and lowered payments while promising a huge balloon payment at the end of the term.
That restructuring never was implemented because of resistance by creditors. Since then, the university has negotiated with small groups or individual creditors to reduce or repay its debt.
DeMoss said all of the debt now has been restructured and that the school no longer faces any threats of foreclosure or bankruptcy.
Saturday's action allowed the university officially to take the debt off its books, though in effect the debt was erased as Reeber and Thomas accumulated it since they didn't demand any payments.
``I know in the past year or two, some people have been skeptical about the nature'' of Reeber's and Thomas' relationship with the university, DeMoss said.
``They don't get anything except whatever personal satisfaction they have received for doing what they have done,'' he said. The two are on the university's board of directors, but never have attempted to exert undue influence on the board or the university, DeMoss said.
``We never questioned their motives. They've done what they've done at great risk and personal sacrifice and without collecting a nickel.
``They were not looking for their names on buildings'' or other recognition, DeMoss said. ``They are just interested in Christian ministry.''
The Christian Heritage Foundation that Reeber and Thomas head is involved primarily in mission work in Russia, DeMoss said.
by CNB