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Dave Larsen writes about higher education.Home > Blogs > On Campus > Archives > 2008 > March > 28 > Entry
Antioch College takeover negotiations fail: University said it needed $12.2 million in cash up front
(Art Zucker, chair of the board of trustees; Toni Murdock, chancellor.)
3:00 p.m.
Antioch University said this afternoon it rejected an offer from an independent corporation of wealthy alumni to purchase the college for an agreed-upon price of $12.2 million because it needed the whole kit-and-caboodle up front, at closing to keep creditors satisfied.
The Antioch College Continuation Corporation, a Yellow Springs-based non-profit corporation of alumni and former trustees, proposed in December buying the college from the university to make it an independent institution. Negotiations took on a sense of urgency in late February, when the university trustees reaffirmed their June 2007 decision to close Antioch College for a year starting this June, after initial negotiations with the AC3 did not produce an agreement. The final impasse came today, after trustees evaluated what ACCC said was its “best and final” offer Wednesday night.
The university said today the ACCC offered to pay half the purchase price at closing, and then pay the rest over five years. But an installment arrangement would not be acceptable to the university’s creditors “which must ratify the terms of the deal,” the university said. That was the deal-breaker. If they agreed to the deal and for some reason ACCC defaulted on those last remaining payments, “the university’s only remedy wold be to foreclose on the real estate,” Bruce Bedford, chair of the trustee finance committee, said in the statement.
That part about the creditors caught my attention.
In a telephone interview this afternoon, University Chancellor Toni Murdock said that the university’s credit situation isn’t dire, but it does have significant debt in the form of bonds on the new Antioch University McGregor building, and buildings in Seattle and in Keane, New Hampshire.
Transferring the college assets to the ACCC while the university still had outstanding bonds “creates a huge negative impact on the university’s balance sheet,” the university said.
Murdock elaborated. “Because we had so much debt in relation to the bonds we needed to have enough assets to…It put us in financial jeopardy. If you take away all the assets of the college then it gives bankers pause.”
Which begs an interesting question: How important are the college’s assets to the bonds? College faculty, staff and alumni critical of the administration have questioned the university in the past on whether the college’s assets have served as collateral on bonds. The university has always maintained that the bonds were financed based on each campus’ projected revenue, and the college assets were never at risk.
But it appears that nonetheless, the university’s eggs are in one basket. Murdock on the phone said it needed some assets - either the college, or the $12.2 million in cash - if it hoped to secure future loans on other campuses that need updates (Los Angeles, Santa Barbara).
Another sticking point was WSYO, the NPR affiliate station based in Yellow Springs. The ACCC wanted WYSO as part of the $12.2 million purchase; the university said it wanted to keep WYSO but would let the college use it. They couldn’t work that out.
Members of the ACCC said in a statement today the rejected proposal was its “best and final offer,” and it appears their attempt to take control of the college is over.
“Our offer would have enabled Antioch College to thrive and grow, while simultaneously infusing the rest of the university with millions of dollars in cash,” said Frances Degen Horowitz, co-chair of the ACCC and president emerita of the Graduate Center of the City Unviersity of New York. Horowitz is a college alum.The AC3 said it had raised $18 million to operate the college in the short term, and was preparing to launch a fundraising drive to secure a total of $100 million for its long-term future. The group had hired a turnaround management firm to prepare a detailed five-year plan to increase the college’s enrollment and staffing.
It sounds like everyone involved is disappointed.
“To have worked this hard - and be this close - and not have an agreement is truly heartbreaking,” said Art Zucker, chair of the board of trustees in a statement.
“This is a sad day not only for Antioch, but for all those who care about progressive education in this country,” said Eric Bates, co-chair of the ACCC, who participated in the negotiations.
Murdock said administrators are going to rest for awhile, and then by summer will turn to figuring out how to re-open the college after it closes for one year starting June 30. The university’s headquarters will remain in Yellow Springs, she said. Antioch University operates five campuses nationwide in addition to Antioch College, including Antioch University McGregor also in Yellow Springs. Those campuses will remain open.
But there’s another front in the multidimensional fight to keep the college from closing June 30. On Tuesday, April 1, a hearing in Greene County Common Pleas court will hear evidence in a lawsuit Antioch College faculty filed against the university March 10, alleging the university broke its contractual obligation with the faculty in its decision back in June to declare financial exigency and close the school at the end of this academic year.
The faculty seek a permanent injunction requiring the university follow the faculty policies and prevent it from suspending operations. The faculty also ask the court to enjoin the university from liquidating or dispersing its assets, including buildings, land and its endowment.
I’ll be covering the hearing here on the blog.
Permalink | Comments (16) | Post your comment | Categories: Antioch College
Comments
By Matthew Arnold
March 28, 2008 1:53 PM | Link to this
For the good of the College, its devoted staff, faculty, students and alumni, as well as Yellow Springs and the University, the board must reconsider this foolhardy decision to torpedo a vital educational institution despite a groundswell of support and fundraising from alums. I hope the trustees will second-guess the verdict of their negotiators, Art Zucker and Toni Murdock, whom I believe have never been negotiating in good faith and have, going by their past statements and decisions, had it in for the College all along. The ACCC has enlisted the best expertise you can get to design their business plan. I trust that it’s sound and their offer is fair. Trustees, here’s your shot at a great victory for humanity. Please don’t let us and Horace down.By treehugger
March 28, 2008 1:55 PM | Link to this
Dirty hippies.By Christian Feuerstein
March 28, 2008 2:39 PM | Link to this
I, for one, salute the ACCC and its tremendous efforts over the past four months. I also want to remind all friends of Antioch College, be they students, parents, staff, faculty, alumni or townspeople, that in late February the community came together with plans for “NonStop Antioch.” The College Revival Fund, Inc., committed $1 million for keeping Antioch College alive and well in Yellow Springs, and continuing to fight for the College’s assets. The CRF continues to plan to fundraise and to support litigation, including the faculty’s current lawsuit.By Travis Sanford
March 28, 2008 3:01 PM | Link to this
This is perhaps the grossest dereliction of trustee duty in the history of higher education. With perfectly viable plans on the table and a large scale cash infusion, the University’s negotiators walk away from an offer that would save the school they are entrusted to protect. The overwhelming majority of the trustees are Antioch alumni, they must unite now and depose the Chairperson of the Board Art Zucker and the Chancellor Toni Murdock who have conducted negotiations in bad faith. Absent such a revolt, I look forward to the depositions and public testimony of Antioch University officials and trustees as they explain how a reasonable offer could be refused when it represented a less drastic means than closure of the college, the point of the ongoing faculty suit. Non-Stop Antioch will move in the interegum to provide a REAL Antioch education.By Robert Devine
March 28, 2008 5:38 PM | Link to this
Since announcing the closing of Antioch College in June, the University and Board spokespeople have insisted that the other campuses were in good shape, and that the University would be stronger and more viable without the drain of the College. It turns out that the University desperately needs the assets of the College — it’s endowment, its campus, its library, its nature preserve, its NPR radio station — or cash in hand to replace those assets in its portfolio. In fact, the closing of Antioch College has been, to a great extent, a raid on assets.By john
March 29, 2008 2:07 AM | Link to this
1.I find it very hard to believe that Zucker or Murdoch have ill motive towards Antioch. Being responsible for the failure of an institution will not help their resume or professional image. 2. What intrigues me is why did the student body shrink so dramatically, and why did the alumni ignore this for so long? I was very surprised to learn how much the school had shrunk, it is smaller than most Div.2 high schools.If the powers that be don’t answer the question of how did Antioch progressively over the years become so irrelevant to so many high school seniors,it won’t matter if it stays open or not.If it doesn’t cure its irrelevancy and the trend continues, there simply won’t be any students…By painfultruth
March 29, 2008 9:36 AM | Link to this
Antioch had its time in the sun in the 1960’s. With less than 200 students, the value of maintaining the college is meaningless. In business, you think with your head, and not rely on emotions. Yes, threaten a lawsuit. That’s the American way when you pout. The ultra-liberal views of Antioch have little weight in the world of today. The 60’s are over, and so should be Antioch. Atti-ca! Atti-ca! Atti-ca!By Paul
March 29, 2008 10:47 AM | Link to this
Amazing. Anti-capitalist/Marxist/Communist/Anarchist “feelers” (not thinkers) can’t comprehend why their utopia of touchy feely non productive waste won’t stay open. Did all the bong sucking and acid eating alter your train of thought? I don’t believe so. It enhanced your embracing of your “herd” mentality. None of you are individuals, capable of innovative free thought. You lost yourselves in the “collective”. Looks like “The Collective” is broke. Producing absolutely nothing through the years of your wreched existance produced where you are now. “Feelings…nothing more than feelings…” Good job, Comrades. HA!!By tosay
March 29, 2008 11:07 AM | Link to this
If you have nothing nice to say - isn’t it best = To just not say anything at all?By Dave
March 29, 2008 2:55 PM | Link to this
Seriously, how do you close a college for one year? The students transfer to other schools, the faculty get other jobs — after a year, you have to start from scratch. Sounds like a load of bull from folks who don’t want to admit they are closing the school FOREVER.By Paul
March 29, 2008 6:36 PM | Link to this
tosay: Yes, if you can’t say anything nice about Caligula, don’t say anything at all. OOOOOHHH…sounds like “isn’t it best” is the same verbal mantra used by “feeling” losers world wide. You are a condecending idiot. Marx, Lenin, Mao, Hitler, Pol Pot, (a favorite of Antioch comrades, Pol Pot killed millions, not a “peep” from anyone in Yellow Springs)and dead from various other despot/totalitarians world wide Antioch has supported has never elicited a response from you, unless they were “freedom fighters”…Ha!) aligned with you. Your simpleton response to my comments about your “world” in Yellow Springs shows your absolute resolution to not engage in dialog…(IE facts, truth). I WILL respond to you if you want to talk. You despot/anti-freedom supporters (An Antioch Grad has never met a despot anywhere in the word he/she hasn’t liked) enjoy silence…the same silence that shouts out from the hundreds of millions of dead (silenced)due to your Communist/Socialist agenda. Antioch will be silent from now on. It is this silence from you anti-human/anti- freedom/anti-life barbarians (you are barbarians…you just haven’t had a chance to slaughter in the U.S. yet) shows that eventually truth will win out. Antiochs corruption, lies, total misunderstanding (and I’m being kind saying this) of the human condition has provided your downfall. The arrogance of you people is proof you haven’t a clue.By Unwealthy
March 29, 2008 10:26 PM | Link to this
Having read this article, I don’t understand how these “supposedly wealthy” ACCC people can’t put up the total $12.2 million in cash, when they say they they have $18M already. And I for one would never agree to take a $6.2M UNSECURED note(even from a group of wealthy Antioch alum, let alone anybody else). It sounds like these people were all talk about wanting to buy the College, and I don’t blame the University for turning down their offer. If this is any indication how those alums run their personal lives, then they aren’t fit to run a College anyway. My bet is, they aren’t as wealthy as they think they are, or they knew they couldn’t raise the money anyway to rebuild it. It’s always easier to blame the other person, but in this case I think the University comes out as the honest party here.By Callie
March 31, 2008 8:58 AM | Link to this
ANTIOCH COLLEGE CONTINUATION CORPORATION For Immediate Release CONTACT: Lyn Chamberlin 978.443.0400 lyn@skyepr.com ACCC SAYS ONE FINAL OPTION TO SAVE HISTORIC COLLEGE REMAINS; —With Time Running Out, Major Donors and Educational Leaders Urge Reforming of University Board As Only Viable Solution— Yellow Springs, Ohio—March 30, 2008—Antioch University has forfeited an agreement to create an independent Antioch College by dragging out negotiations in an effort to profit from the College’s current difficulties, a group of major donors and educational leaders announced today. “The issue is not about money – it’s about time,” said Eric Bates, co-chair of the Antioch College Continuation Corporation, which was formed to negotiate independence for the historic liberal arts institution. “As a result of the University’s repeated foot dragging it would now be extremely difficult, if not impossible, to receive the necessary regulatory approvals to continue operating the College next year as a separate entity. Through its needless delays, the University has squandered a historic opportunity and created a self-fulfilling prophecy.” The ACCC’s final offer, Bates added, is no longer on the table. “The University would like everyone to believe that there are ‘remaining financial differences’ with the ACCC that can be broached with the help of outside parties,” he said. “In fact, we set realistic deadlines for the negotiations based on outside, expert counsel on what it would take to keep the College open, without disruption to students, faculty and staff. The University rejected our best and final offer after being given a clear and unequivocal deadline. For their negotiating team to pretend otherwise is simply disingenuous.” David Goodman, a director of the ACCC who has negotiated dozens of mergers and acquisitions, said the University has misrepresented the reasons that negotiations failed. “This was never about security for the ACCC’s payment,” Goodman said. “We were fully prepared to provide the University with not one, but two forms of security: a mortgage on the campus, and a provision that the College and its assets would revert to the University if the ACCC were unable to continue operations. The ACCC’s offer was both financially reasonable and legally enforceable, but the University made clear that they would not accept the offer – even if their creditors were satisfied with the agreement.” The issue of security, the ACCC added, is simply the latest in a series of obstacles that the University has invented to impede negotiations. In talks, the University’s negotiating team spoke of its desire to “leverage the College’s assets” and made clear that it did not want to share ownership of WYSO because it wants to explore the possibility of selling the public radio station. “At one point, nearly an entire month was lost because the University continued to demand that the ACCC pay $54 million for the College’s assets,” Bates said. “Under this absurd and outrageous demand, the College would have been required to ‘buy’ its own endowment from the University, at a cost of $22 million. Rather than seeking to find a solution that would benefit all parties involved, the University chose instead to engage in profiteering that prevented a timely and mutual resolution.” While the University chose to forfeit the ACCC’s offer of $12.2 million for the College, the group emphasized that there is still one alternative that would enable the College to continue operating next year. More than a month ago, the ACCC offered to make an immediate contribution of $10 million in return for ten seats on the nineteen-member University Board of Trustees. The offer stands in stark contrast to the dismally low contributions by the current board, which reportedly total less than $25,000 in the current fiscal year. The ACCC noted that it has yet to hear a response to its “10-10 plan,” which it is still prepared to discuss. “This is the only remaining arrangement that can enable the College to continue operating next year while creating a truly philanthropic board for the University,” Bates said. “This is not a hostile takeover – it is a remarkably generous and well-intentioned offer by an experienced and supportive group of alumni, six of whom are former University trustees. We remain mystified as to why the board has not acted on this win-win solution that could be enacted within a matter of hours.” The ACCC said it would welcome the involvement of any outside parties who could persuade the University to take immediate advantage of this simple and effective solution. “It is the only offer still on the table,” said Frances Degen Horowitz, co-chair of the group and president emerita of the Graduate Center of the City University of New York. “The best solution at this point is for the University to accept the 10-10 plan and immediately create a philanthropic board of trustees that will provide the leadership and stability necessary for both the College and all the units of the University to prosper.” For additional information on the Antioch College Alumni Association and the Antioch College Continuation Corporation: www.antiochians.org. -###-By Dennis Blackmore
April 1, 2008 11:11 AM | Link to this
I was born and raised in Middletown, but have spent most of my adult years in Wisconsin, but one of the places I was thinking of moving to in retirement was Antioch. Now, with the future of higher education there in doubt, I’m not so sure. I’m afraid of a “corporate mentality” make-over which would be sadBy mike wujnovich
April 26, 2008 8:40 AM | Link to this
Simply stated, the college is worth keeping. For all of the vile things some of the above commenters have said, I can personally attest to the basic and main stream experience I was afforded in the midst of my maturing college experience. I studied Social Sciences in small classes with excellent teachers and bright but questioning critical students. My experiences on campus made me challenge my beliefs and yet there was acceptance of me- an All American sports playing kid from the suburbs. Yeah, at times I did not know if I should dye my hair of shave it off, so I did not bother with it and no one seemed to care. My internships included working in Peace Education with the Quakers in Philly, a medical research organization in New York, a sister cities program in Burlington, Vermont, the Associated Press galleries in the US capitol and Supreme Court and WYSO radio. I currently teach IB History and raise two soccer playing kids in Florida. Pretty standard stuff. The values of Antioch are the same ones my Staff Sargeant father instilled in me. Respect for the value of people, and the love for our country that says pitch in, get your hands dirty, work to make our ideals more than words…Justice, equality, liberty, opportunity all come with sacrifice and hard work. That is what Horace Mann believed and that is what Arthur Morgan believed. This is at the core of the Antioch Experience. If this is antithetical to your world view and you cheer the difficulties we are experiencing I am sorry for you. The cops at spring break- girls gone wild version of college in America may have its merits (I have no doubt some of those kids could be Antiochians, mind you) but the merits of Antioch are worth saving. And hey, I like to earn a buck too, and yet, I still believe in social justice. The size of the school makes it hard to sustain. But it would be a shame to silence its voice. God, or Buddha, or the Big Bang, or whatever you believe in bless Antioch! Mike Wujnovich ‘87By mike wujnovich
April 26, 2008 8:40 AM | Link to this
Simply stated, the college is worth keeping. For all of the vile things some of the above commenters have said, I can personally attest to the basic and main stream experience I was afforded in the midst of my maturing college experience. I studied Social Sciences in small classes with excellent teachers and bright but questioning critical students. My experiences on campus made me challenge my beliefs and yet there was acceptance of me- an All American sports playing kid from the suburbs. Yeah, at times I did not know if I should dye my hair of shave it off, so I did not bother with it and no one seemed to care. My internships included working in Peace Education with the Quakers in Philly, a medical research organization in New York, a sister cities program in Burlington, Vermont, the Associated Press galleries in the US capitol and Supreme Court and WYSO radio. I currently teach IB History and raise two soccer playing kids in Florida. Pretty standard stuff. The values of Antioch are the same ones my Staff Sargeant father instilled in me. Respect for the value of people, and the love for our country that says pitch in, get your hands dirty, work to make our ideals more than words…Justice, equality, liberty, opportunity all come with sacrifice and hard work. That is what Horace Mann believed and that is what Arthur Morgan believed. This is at the core of the Antioch Experience. If this is antithetical to your world view and you cheer the difficulties we are experiencing I am sorry for you. The cops at spring break- girls gone wild version of college in America may have its merits (I have no doubt some of those kids could be Antiochians, mind you) but the merits of Antioch are worth saving. And hey, I like to earn a buck too, and yet, I still believe in social justice. The size of the school makes it hard to sustain. But it would be a shame to silence its voice. God, or Buddha, or the Big Bang, or whatever you believe in bless Antioch! Mike Wujnovich ‘87