Birmingham-Southern sues Alabama state treasurer, says college was wrongfully denied loan

MONTGOMERY, Ala. (AP) — Birmingham-Southern College has filed a lawsuit against Alabama’s state treasurer for denying a loan from a program created by lawmakers to help the historic but financially troubled private college.

The lawsuit contends Treasurer Young Boozer wrongly denied the college a loan from the program created this year to provide a financial lifeline to the institution. The 167-year-old college will likely close without emergency relief from the court, lawyers wrote in the lawsuit filed Wednesday.

“It is an undisputed fact that Birmingham-Southern College has met each and every requirement of the law,” Birmingham-Southern President Daniel Coleman said in a statement.

Boozer’s office did not immediately respond to a telephone message seeking comment on Friday.

The Alabama Legislature this year created the Alabama Distressed Institutions of Higher Education Revolving Loan Program after Birmingham-Southern officials, alumni and supporters lobbied for money to help the college stay afloat. State officials had expressed concerns about giving a bailout to a private college, but supporters of the loan legislation said it was a way to provide bridge funding while the college worked to shore up its finances.

The college is asking the court for an emergency order to approve the loan and disburse the first $8.8 million by Nov. 6, with another installment of $7.2 million by Feb. 1

Montgomery Circuit Judge James Anderson held a hearing Thursday and scheduled another for Wednesday. Al.com reported that during the hearing Anderson questioned whether he has the authority to order the treasurer to approve the loan, saying the law appears to give discretion to the state treasurer. The Alabama attorney general’s office also argued that Boozer’s office has immunity from the lawsuit.