State Treasurer Young Boozer has released a statement following a lawsuit with Birmingham-Southern College. The full statement can be read below. The college sued Boozer after he denied them funds from the Distressed Institution Act earlier this month. The lawsuit was dismissed by a judge.
“I am disappointed with the incendiary rhetoric of President Coleman. He falsely claims that I acted arbitrarily or capriciously, or in bad faith, or misinterpreted the law in question. I did not. President Coleman is wrong,” said Treasurer Boozer.
Boozer states when legislators encouraged Birmingham-Southern’s Board of Trustees to vote to stay open in April, the legislators did not have a clear picture of the college’s creditworthiness, or terms and conditions that would later be added to the law. He also claims he informed President Daniel Coleman the load was denied over the phone on October 13th, and sent a letter dated for that day.
Boozer goes on to say, the college did not meet the proper collateral requirement in the statutory minimum requirements and that the first perfected security interest could not be attained without the existing principal lender subordinating.
The college’s Moody’s credit rating of Caa2 confirms it to be a junk bond, one step above default.
In another statement, Boozer confirms Selma University also applied for funds from the Distressed Institution Act. He did not reveal how much of a loan they applied for.