We have reported on the numerous problems Thomas Jefferson Law School has had in recent days. Incredibly, it gets worse.
According to the 10th Consent and Forbearance Agreement (the “Agreement”) Thomas Jefferson Law School signed (relating to loans for its shiny, $100-million+ building):
“on or before September 12, 2014, TJSL shall provide the Trustee’s advisors with the information and advice … with respect to the accounting treatment of the currently contemplated deed-in-lieu restructuring transaction.”
Click here to view the 10th Consent and Forbearance Agreement Thomas Jefferson Law School signed.
What this means is that the school has agreed to give its building to bondholders. The school has already assigned all of its cash assets to its bondholders. The bondholders are allowing Thomas Jefferson Law School to draw down operating expenses only until the end of this semester. The law school is likely to lose its building and cease operations according to our analysis of the Agreement.
For another law school in deep trouble, please see our article about Thomas Cooley: Thomas Cooley Law School Exposed. The name “Thomas” may be cursed when it comes to law schools.
After reading the document, this is a standard Consent and Forbearance Agreement between the school at the Bondholders. As the primary creditors for TJSL, of course they have the power to liquidate the assets if TJSL continues to default. Similar to a situation if you don’t pay your car payments, the lender can come take the car away.
This in fact is good news for TJSL as it shows that both the school and the lenders are working in good faith for a restructuring of the debt. It also states that the September payment has been paid and the requirement is to pay the next payment by October 17th, or until a new deal is worked out.
Basically this agreement shows that both sides are working towards a resolution, and while they do the school can conduct “business as usual”.