MONTGOMERY — On Wednesday, Montgomery County Circuit Judge James Anderson dismissed a lawsuit filed by Birmingham-Southern College (BSC) last week against Alabama State Treasurer Young Boozer.
BSC filed the lawsuit against Boozer after he denied the private school a $30 million state loan last week. Legislators passed the Distressed Institutions of Higher Education Revolving Loan Program and appropriated $30 million in the 2023 legislative session. The Alabama State Treasurer’s Office administers the program.
Jim Davis, an Alabama Assistant Attorney General representing Boozer, argued Boozer was protected by sovereign immunity from the lawsuit and had discretion under the law creating the loan program to deny the private school a state loan. Anderson agreed.
“They want their application looked at, [and] the application has been looked at. The Treasurer has worked with the college, has reviewed all the material that they submitted,” Davis said in the court hearing Wednesday.
In his letter announcing his decision to deny the loan, Boozer said, “After a thorough review of the application and all supporting documents, it has been determined that Birmingham-Southern College can not provide the state a first security interest in its collateral assets.”
“Additionally, the institution’s financial restructuring plan does not adequately provide for repayment of the loan,” he added.
According to Boozer, the Treasurer’s Office received loan applications from Birmingham-Southern College on August 24, 2023, and from Selma University on September 1, 2023.
“On Friday, October 13th, 2023, I notified leadership at Birmingham Southern College and Selma University that we will not be able to provide loans to their institutions based on their not meeting the required statutory minimum criteria,” Boozer said in a statement on Wednesday to 1819 News.
Boozer said, “I am pleased with the dismissal of this lawsuit and confirmation that I have acted in accordance (with) the law.”
BSC president Daniel Coleman said in a statement Wednesday, “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,” Coleman said. “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.”
Attorneys for BSC said the school’s board will decide at a meeting on October 31 whether to shut the school down without the loan.
JR Golden, a junior at Faulkner University who transferred out of BSC after the previous academic year, told 1819 News his former classmates weren’t expecting to be in this situation.
“It was really unexpected for them to be in this situation again. They thought that everything was going to be okay. Obviously, it’s sent morale down. Everyone is unhappy about it,” Golden said. “They’re just trying the best they can to stay level-headed about it and just live their everyday life. It is something that affects them. That thought is in the back of their head now, and it’s something really difficult for them to deal with. They were just waiting to see what happens as far as what was going to transpire today in the court case as far as you know if the treasurer was going to be pretty much forced to give them a loan or not. Most of them did say if they wound up getting the loan and they could’ve stayed open that they would’ve stayed. Now, especially with the way things are looking after today, most of them probably will look to go somewhere else.”
He continued, “It’s unfortunate that they got in that situation. Birmingham-Southern has been known for years as a very prestigious liberal arts college in the state. I know several people when I decided to attend there out of high school told me how good of a college it was and what a good decision I was making. It’s just very unfortunate they’re in that circumstance.”
To connect with the author of this story or to comment, email [email protected].
Don’t miss out! Subscribe to our newsletter and get our top stories every weekday morning.