West Virginia college files for bankruptcy a month after announcing intentions to close
Aug 31, 2023, 3:30 PM | Updated: 4:54 pm
CHARLESTON, W.Va. (AP) — A small, private university in West Virginia declared bankruptcy on Thursday, a month after announcing that it planned to stop operating.
Alderson Broaddus University filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court for the state’s northern district. According to the filing, the university estimated it had between $1 million and $10 million in total assets, liabilities of between $10 million and $50 million and owed money to between 100 and 199 creditors.
The filing was signed by Alderson Broaddus interim president Andrea Bucklew. The Chapter 7 filing would allow the university to liquidate its assets. The campus community was notified of the decision, the university said in a statement.
Alderson Broaddus Board Chairman James Garvin said the panel “is grateful to the students, employees, alumni and donors who have embodied the Christian spirit of the University, and through them, the legacy of AB will live on.”
On July 31 the university’s Board of Trustees voted to develop a plan to disband after another board overseeing the state’s four-year colleges and universities revoked its ability to award degrees effective Dec. 31. The university said the revocation meant the school could have offered only limited classes to about 20 students this fall. The Baptist university’s 625 students on the Philippi campus were forced to scramble to enroll at other colleges.
Other state universities, including West Virginia Wesleyan in nearby Buckhannon and Fairmont State University in Fairmont, offered application and transcript evaluation assistance to Alderson Broaddus students.
Student academic and financial records have been transferred to West Virginia Wesleyan, located about 21 miles (34 kilometers) from Alderson Broaddus. West Virginia Wesleyan will make transcripts and other information available to former Alderson Broaddus students.
Earlier in August West Virginia Wesleyan said it had accepted more than 20 transfer students from Alderson Broaddus.
Alderson Broadus said it had anticipated receiving an employee retention credit payment from the Internal Revenue Service of more than $1 million. However, the money didn’t arrive in time.
The school’s website was taken down Thursday and the institution encouraged its employees to seek unemployment insurance benefits.
The university, which was founded in 1932, has been struggling financially for several years.
It had accumulated $775,000 in utility debt and paid the city of Philippi $67,000 last month on the day of a shutoff deadline. It also planned structured repayments to resolve the remaining balance.
Alderson Broaddus was placed on probation in 2017 by its accreditor, the Higher Learning Commission. The probation was lifted in 2019, although the school remained on notice that it needed to continue addressing concerns, in part because it had missed bond repayments. The university announced last week that it voluntarily resigned its accreditation with the commission due to its upcoming closure.
The commission was told in July that the U.S. Department of Agriculture had previously agreed to restructure a $27 million loan to the university to allow for more flexible cash flow. The school was offered assistance through a USDA program providing loans and grants to help expand economic opportunities and create jobs in rural areas.
In April, the university sought alumni contributions to raise money immediately.
Another private state school, Ohio Valley University in Wood County, went bankrupt and abruptly closed in 2021.
