Birmingham-Southern College lawsuit dismissed by judge—future of the school uncertain

Birmingham-Southern College’s lawsuit to compel Alabama State Treasurer Young J. Boozer III to loan the school $30 million under the Distressed Institutions of Higher Learning Revolving Loan Fund Act was dismissed by Montgomery County Circuit Court Judge James Anderson this afternoon. 

BSC’s $30 million lifeline

The law, which was passed by the Alabama Legislature on June 6th and signed into law by Governor Kay Ivey on June 16, was designed to provide the 167-year-old college a $30 million lifeline.

On October 18th, BSC received a letter from the state treasurer denying the school’s loan application. According to BSC President Daniel Coleman, following months of discussions, the State Treasurer gave no indication that his office would turn down the school’s application.

The loan would have provided the college operating funds for three years, enabling the institution to raise an endowment of up to $200 million.

BSC is exploring options

President Coleman made the following statement about the decision:

“We are disappointed with this ruling and are exploring our options, which may include an appeal to the Alabama Supreme Court with a request for an expedited briefing. While the Alabama Constitution provides for immunity to state officials, such immunity should not apply to those who act arbitrarily or capriciously, or in bad faith, or who have misinterpreted the law in question. 

Our good faith was betrayed over the several months of working with Treasurer Boozer to deliver this bridge loan to the College. The timeline of our interactions clearly demonstrates that his behavior was arbitrary and capricious. We also believe he is misinterpreting the language of the Act pertaining to collateral.” 

Daniel Coleman, President, Birmingham-Southern College

School’s future in limbo

The school’s future is now in limbo. If funding from the state is not secured the school has indicated that it may close by the end of the year.

Read more about the history of Birmingham-Southern College’s struggles:

• 1/31/2023 — Alabama needs Birmingham-Southern College. Here’s how you can help save it.
• 2/21/2023 — Birmingham-Southern College generates $97.2M for Alabama, independent study finds
• 3/21/2023 — 24 founders of technology-related companies support Birmingham-Southern College
• 4/6/2023 — Birmingham-Southern College Board of Trustees votes to remain open
• 6/7/2023 — Bill designed to help BSC and other Alabama colleges now law

Stay tuned to Bham Now for updates on this story.