Owner of St. Andrews University Campus Files for Bankruptcy 

The nonprofit organization that owns most of the land once belonging to St. Andrews University, which closed last year, filed a notice for bankruptcy in federal court Tuesday. 

The move comes days before a scheduled auction to sell the majority of St. Andrews’ main campus, blocking both the sale and the foreclosure enabling it.

Scotland Development Corp, headed by Laurinburg city councilman Andrew G. Williamson, seeks relief for around $5.6 million in assets and $11.2 million in liabilities under Chapter 11 of the Bankruptcy Code. The case is being handled in the U.S. District Court for the Middle District of North Carolina. 

The future of St. Andrews’ campus has been the subject of speculation in Scotland County for months. Once a thriving liberal arts school, St. Andrews saw declining enrollment for years, and the campus was severely damaged during Hurricane Florence in 2018. Even so, it remained an economic driver in rural Scotland County. 

Scotland Development Corp plays a central role in the dense legal thicket surrounding St. Andrews’ land and assets.

SDC first purchased large sections of St. Andrews’ campus in 2011, leasing it back to the university at the same time. That arrangement was put in place before Webber International University, a private school in Babson Park, Florida, bought St. Andrews in 2011, providing an additional layer of local control for the land. SDC didn’t profit from the deal, Williamson told The Assembly and Border Belt Independent last year; the rent was simply passed along to the university’s creditors.

First Mortgage Bondholders, a Georgia lender, was among them. The company lent St. Andrews $12 million, with the heart of the campus as security for the loan. 

Webber stopped its rent payments in April, the month St. Andrews closed, SDC said in a statement Thursday. In early December, Argent Institutional Trust Company began the legal moves to foreclose on SDC on behalf of First Mortgage. Argent first removed Williamson’s law firm from its role as a trustee for SDC, then initiated foreclosure proceedings at the end of the month, claiming in its filing that SDC had failed to make its required monthly payments. Argent also scheduled an auction, originally set for Thursday, to sell the major part of St. Andrews’ main campus.

By submitting a voluntary petition for Chapter 11 bankruptcy on Tuesday, SDC stalled the foreclosure, forcing Argent to remove the case from the court docket.

SDC also took other moves, apparently to protect other parts of the campus. In December, after Argent removed Williamson as a trustee but before it initiated foreclosure, SDC took ownership of six parcels of land it didn’t yet control and immediately deeded them to a separate organization with a similar name: the Scotland County Economic Development Corporation. SDC took on $2.7 million in debt in the process, including $850,000 in principal and a $100,000 line of credit from SCEDC.

Williamson declined to answer questions about the deal or the bankruptcy, instead providing a statement saying, in part, that SDC “filed Chapter 11 to determine the possibility of retaining a portion of its assets pursuant to a plan of reorganization.”

John A. Northen, the lawyer representing SDC in the bankruptcy case through Northen Blue, LLP in Chapel Hill, said they will file a plan and disclosure statement in the coming months regarding what they propose to do with the property and its creditors. 

“It’s something that needs to be approved by the court before it’s circulated,” Northen said. “I don’t want to get over that before it’s been approved for circulation.”

SDC’s bankruptcy shows that Argent is owed nearly $6.3 million, though $2.7 million of that—almost the exact amount SDC gained through its transaction with SCEDC—is covered by collateral.

One of St. Andrews’ other major creditors, Missouri’s Foundation Capital Resources, is owed $4 million for its claim on the land that held the university’s equestrian center. Almost $1.6 million of that is covered by collateral. The filing also lists Cabarrus, Cleveland, Moore, and Scotland counties as creditors for unknown amounts of ad valorem tax.

Chris English, director of the Laurinburg-Scotland County Area Chamber of Commerce, said it’s still unclear what the bankruptcy filing will mean for the campus site.

“I wish I could speak on this,” he said, “but it’s still too early to tell.”