Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, June 29, 1995 TAG: 9506290104
SECTION: VIRGINIA PAGE: C-4 EDITION: METRO
SOURCE: Associated Press
DATELINE: LYNCHBURG LENGTH: Medium
The academic accrediting association placed Liberty on ``warning'' status in June 1994 after ruling that its financial resources were inadequate. Warning status is an intermediate sanction, which can be elevated to probation and eventually lead to loss of accreditation if the school fails to resolve concerns raised by association officials.
``We're glad to have the warning status removed. This represents one more step in the road to financial recovery,'' Liberty Chancellor Jerry Falwell said in a written statement.
The association's governing commission met Wednesday in Charlottesville.
Jack Allen, associate executive director of the association's Commission on Colleges, said the decision was based on Liberty's progress in improving its financial condition.
Specific details about individual colleges and their accreditation status are kept private, but Allen confirmed that a recent erasure of about $30 million in debt owed by Liberty influenced the decision.
Daniel Reber and Jimmy Thomas, Forest businessmen and longtime supporters of the university, announced in January they forgave an estimated $30 million in bonds they purchased at discount prices from Liberty creditors.
Liberty officials worked for several years to come up with payment plans to cover all of its debts, which totaled $72 million in 1992. The school is up-to-date on payments to all of its major creditors. It made its fourth payment of $340,000 in April to 2,200 bondholders who hold a first lien on the campus.
The bondholders are owed a total of about $18 million, making them the largest of Liberty's creditors.
Christian Mutual Life Insurance Co., the second largest creditor at $16 million, is getting annual payments from two sources: revenue generated by Liberty's video education degree program and mortgage payments for the university's senior dormitories.
Liberty President Pierre Guillermin met Tuesday with a special association committee that visited Liberty's campus this spring to determine whether it had improved its financial standing. The committee's recommendation then was voted on Wednesday by the governing commission of the association, which consists of 77 college officials elected from among the 800 colleges that are accredited through the agency.
Although Liberty no longer is under sanctions, it still faces scrutiny in the coming year as part of its regular re-accreditation process, which occurs every 10 years.
Allen said a re-accrediting committee will visit the campus early next year to review all aspects of the university's operations, including academics and finances.
by CNB