Birmingham-Southern College Statement Following Hearing on Lawsuit Against State Treasurer
Birmingham, AL (10/25/2023) — Montgomery County Circuit Court Judge James Anderson has dismissed BSC's case seeking to compel Alabama State Treasurer Young J. Boozer III to execute the Distressed Institutions of Higher Learning Revolving Loan Fund Act, passed on June 6 and signed into law by Gov. Kay Ivey on June 16.
"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," said BSC President Daniel Coleman. "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," he added. "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 collateral."
The bill was conceived and written to allow for a $30 million lifeline to the College, providing operating funds for three years during which it could raise an endowment of up to $200 million to ensure its long-term financial stability. In spring 2023, BSC's Board of Trustees received assurances from legislative leaders supporting a measure to provide bridge funding that, should the bill pass, the College would be positioned to borrow the $30 million in bridge funding required to keep it open.
The state treasurer's denial of BSC's application, which was communicated in a mailed letter dated October 13 that arrived on October 18, followed months of discussions in which he gave no indication that any aspect of BSC's application was wanting, or that he would not act as the Legislature intended, Coleman said.
Since then, the Treasurer has provided inconsistent reasons for his denial, ranging from insufficient collateral, which speaks to his misread of the law, to incorrectly claiming that the College's primary lender, ServisFirst Bank, would not take second position behind the state as a creditor, which is incorrect, to stating that the College was "not a good credit risk," which was the reason the Loan Fund was created in the first place.