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Amherst Co. attorney seeks to block Sweet Briar College closure

Amherst Co. attorney seeks to block Sweet Briar College closure

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Sweet Briar College

The Amherst County attorney is seeking an injunction to block the closing of Sweet Briar College and force removal of the president and board of directors.

“The closure attempt is not only precipitous and unwarranted, it is also unlawful,” County Attorney Ellen Bowyer said in a complaint filed Monday in Amherst Circuit Court.

She asked that a special fiduciary be appointed to take control of the college’s assets and appoint a new president and board.

Bowyer is seeking to block the SBC board and President James F. Jones Jr. from taking any further steps to close the women’s college near Lynchburg.

The complaint alleges the administration has taken action that appears designed to ensure at a very early stage of the process “that operation of the college could not be continued,” such as the destruction of admissions records for prospective students and financial statements.

The complaint, which names Jones and board Chairman Paul G. Rice, also says Sweet Briar is in violation of state law because charitable contributions solicited for the operation of the college are being used to shut it down.

The complaint was filed the same day that Sweet Briar’s attorney sent a response to allegations of wrongdoing made by an alumnae group fighting the board’s announcement March 3 that the college will close in August.

“As much as we would like the financial situation to be different, it is not. Sweet Briar College simply cannot survive,” Woody Fowler, a William Mullens attorney representing the college, said in a letter to Ashley L. Taylor Jr., an attorney for Troutman Sanders who is representing Saving Sweet Briar Inc.

Board members have “legal, ethical and fiduciary responsibilities to Sweet Briar that go beyond their love of the college,” Fowler wrote.

He said the alumnae group’s accusation of unlawful conduct is unfounded and denied that charitable contributions are being misused.

Fowler listed the college endowment at $84.8 million, of which $65 million is restricted in its use. The $25 million in debt the college incurred from two bond issues exceeds the unrestricted funds available to the college, he said.

The college would need to raise $10 million to $12 million a year in unrestricted funds to remain open, he said.

An enrollment of 800 students is needed to sustain the college, but only 532 were enrolled this semester, Fowler said. The average tuition discount for first-year students was 62 percent, a significant increase from 2008 when the discount was already 42 percent, the letter stated.

The discounts meant that net tuition revenue fell over five years from $11 million to less than $8.5 million in 2014, Fowler said.

Last year, as a result of marketing efforts, a record 936 students applied and 738 were accepted. But only 154 students enrolled, the lowest yield in the college’s history, according to the letter. Further, “troubling rates of attrition” resulted in only 54 percent of students graduating last May from those who enrolled four years earlier.

Sweet Briar’s rebuttal was in response to alumnae accusations that parallel some of those included in the county attorney’s complaint. Spokeswoman Christy Jackson said the college’s “legal counsel has just received the complaint from the Amherst County attorney and will respond appropriately after a chance for careful review and analysis.”

Bowyer’s complaint includes the will of Indiana Fletcher Williams establishing the college in 1901, which put her property in a trust explicitly to create “a perpetual memorial” to her late daughter.

Although the closing announcement appeared sudden, the complaint said, the course of action had been contemplated for months, including the hiring of legal counsel to assist with the closing.

Board members who objected to the actions were forced to resign last year, and their attempts to offer alternatives to closing were ignored, according to the complaint.

The 20-page filing includes alternative steps the college could have taken to avoid closing, such as a capital fundraising campaign like one it had successfully completed in previous years.

The board did not seek to recruit students for its renowned equine program and did not make curriculum changes that could have lowered tuition, it states.

The complaint also says the college’s finances were not as bad as portrayed. From 2010 to 2014, annual operating deficits were more than offset by endowment gains, grants and gifts.

Net assets over the past five years increased from $126 million to $134 million, while debt decreased from $42 million to $25 million, the complaint says.

The college also is misusing charitable gifts by redirecting the funds for the purposes of closing the college, it says. Among examples included was the college’s refusal to return a memorial gift for a scholarship made final in January. The alumna who donated the money in memory of her son asked that the gift be sent to St. Jude Children’s Hospital, and her request was denied, the complaint states.

Bowyer said her complaint centers on questions in two areas of state law: the handling of charitable contributions to the college and whether the closure proceedings square with the requirements of the Uniform Trust Code.

“I have spoken with all the affected parties, including the Attorney General’s Office, the lawyers for Saving Sweet Briar, and the college’s lawyers, and I have reached the conclusion that it is necessary and important to examine the closure process within the context of circuit court proceedings,” Bowyer said in a statement.

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