THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, January 31, 1995 TAG: 9501310260
SECTION: LOCAL PAGE: B9 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: LYNCHBURG LENGTH: Medium: 58 lines
Two Liberty University benefactors have purchased and forgiven as much as half of Liberty University's $80 million debt load, the university's founder and chancellor, the Rev. Jerry Falwell, announced.
Businessmen Dan Reber and Jim Thomas, both members of Liberty's Board of Trustees, had been buying debt from two of Liberty's three major creditors for two years. They officially forgave the debts Saturday.
Falwell disclosed the gift Sunday during nationally televised worship services at his Thomas Road Baptist Church.
``They had to borrow money, hock their houses, hock everything,'' Falwell said. ``Thank God for friends like Dan Reber and Jimmy Thomas.''
Thomas did not attend the service, but Reber stood with Falwell when he made the announcement. The congregation responded with a standing ovation.
Liberty spokesman Mark DeMoss said Reber and Thomas are forgiving the notes ``without benefiting or profiting at all.'' DeMoss said he could not be more specific about the amount of the gift, which Falwell said was between $30 million and $40 million.
Falwell said Reber and Thomas still hold $700,000 in debt they cannot forgive until they repay the money they borrowed to acquire it.
Reber and Thomas declined to comment on the debt forgiveness.
The gift reduces Liberty's debt to less than $40 million, most of it owed to three creditors: a group of bondholders, an insurance company and a bank. DeMoss said the sum is reasonable and manageable.
DeMoss said the university has cut or controlled expenses and raised revenue from students while enrollment applications have increased during the last year.
In mid-1992, Liberty tried 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 in exchange for a huge balloon payment at the end of the term.
The creditors resisted and the plan was never implemented. Since then, the university has negotiated with small groups or individual creditors to reduce or repay its debt.
Reber and Thomas have been major contributors to Liberty University over the past two years. They helped pay for Liberty's new dining hall and acquired large portions of the school's debt through the Christian Heritage Foundation, a private organization the men founded in 1985. They bought $16.2 million in debt from Household Finance and $12.6 million from Church and Institutional Facilities Development Corp., or C&I.
The two men also tried to buy debt from 2,200 bondholders who hold a first deed of trust on the campus. The number of bondholders who agreed to the deal has never been disclosed, but officials of the Texas company that sold the bonds have said all of the debt now has been restructured and that the school no longer faces any threat of foreclosure or bankruptcy. by CNB