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University files for Chapter 7 bankruptcy

Students and staff at an out-of-state post-secondary school were surprised to learn their university was closing its doors as of Nov. 2017. St. Gregory's University has filed for Chapter 7 bankruptcy, citing financial difficulties due to a lack of operating funds. As some Kentucky business owners already know, this may be the best decision university leadership could make to account for mounting debt. 

The school is a long-standing academic institution in its home state, having opened in 1875 and bearing the distinction of being the only Catholic university in the state. According to the Board of Directors, the university previously applied for a loan from the U.S. Department of Agriculture for some $12.5 million, but the application was denied by the federal agency. 

Since then, 550 full-time students as well as over 100 faculty members have been notified they must transfer to another school to complete their studies or continue their employment. The executive administrator of the school has confirmed the Chapter 7 filing. He took to Facebook to announce that a court-appointed bankruptcy trustee will handle the school's dissolution of assets moving forward. He went on to say that the abbey and museum associated with the school will continue operations despite the rest of the school closing. 

While students and staff at St. Gregory's may find this transition challenging, Kentucky business experts likely agree Chapter 7 bankruptcy is a positive path for the struggling school. By liquidating the university's assets, the school's leadership will be able to handle its outstanding debt. Additionally, this move will also likely support their mandate to continue running the historical abbey and museum on the school's storied campus. 

Source: kfor.com, "St. Gregory's University files for Chapter 7 bankruptcy", Feb. 20, 2018

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