BRADENTON, Fla. — A Virginia judge approved a mediated deal to keep Sweet Briar College open for another year.
Bedford County Circuit Court Judge James Updike on June 22 formally approved a settlement announced two days earlier by Virginia Attorney General Mark Herring.
Herring mediated a memorandum of understanding between his office and Amherst County Attorney Ellen Bowyer, the nonprofit Saving Sweet Briar alumnae organization, and the college.
Bowyer and Saving Sweet Briar had taken legal action to prevent the 114-year-old women's institution from closing after the end of this year's summer session.
The settlement will, in part, result in the attorney general's consent to release restrictions on $16 million from the college's endowment for ongoing operations.
The loosened funding restriction led Standard & Poor's on June 18 to lower the college's bond ratings two notches, to CCC from B-minus, because it made Sweet Briar's obligations vulnerable to nonpayment, according to S&P analyst Sussan Corson.
The lower rating affects $16.5 million of bonds issued in 2006 by the Amherst Industrial Development Authority. S&P said the outlook is negative. The college has other unrated debt outstanding.
In addition into releasing endowment funds, the settlement approved by Updike also requires certain college board members to resign. New board members will be appointed, including Phillip Stone, who has agreed to serve as the new president.
Stone is a partner at Stone Law Group PLC in Harrisonburg. Until 2010, he was the president at Bridgewater College for 16 years. The new board empaneled at Sweet Briar is expected to vote to continue academic operations beyond Aug. 25, the date the institution's prior leadership targeted for closing.
The settlement agreement also hinges on a commitment by Saving Sweet Briar to deliver $12 million in donations for operations at the college for the 2015-2016 academic year.
As of June 22, Saving Sweet Briar's website said the organization had received $21 million in pledged donations. The group of alumnae organized in March to prevent the college from closure by filing a lawsuit.
