Alabama Treasurer Young Boozer says his recent denial of a $30 million loan to financially struggling Birmingham Southern College wasn’t arbitrary or an act of bad faith, but based on the school’s credit and inability to repay the state’s money.
In a statement issued Sunday, Boozer pushed back against Birmingham Southern College President Daniel Coleman’s statements about the loan denial, which was upheld last week in Montgomery County Circuit Court.
“I am disappointed with the incendiary rhetoric of President Coleman,” Boozer said in the written statement. “He falsely claims that I acted arbitrarily or capriciously, or in bad faith, or misinterpreted the law in question. I did not. President Coleman is wrong.”
Earlier this year the Legislature, in response to the college’s financial hardships, created a state loan program for any Alabama institution of higher education on the brink of closure, in existence for at least 50 years and with sufficient assets to pledge as collateral. Lawmakers dedicated $30 million to it.
Birmingham Southern applied over the summer for a $30 million loan.
The law also says the state treasurer can create the terms and conditions of a loan and “may, in his or her judgment, award a loan to any eligible institution that meets the requirements…”
According to the statement from Boozer, his office conducted a thorough investigation of the creditworthiness of BSC and its ability to repay the loan and months ago Boozer told Coleman the college did not meet the collateral requirements of the law.
The official denial came earlier this month and Boozer said he relayed it to Coleman via a telephone call and then a written letter.
The college sued and Montgomery Circuit Judge James Anderson last week granted the state’s request to dismiss the lawsuit Wednesday on the grounds that the state treasurer could not be sued for exercising his duties. Anderson said the legislation gave discretion to the treasurer to decide who qualified for a loan.
“Our good faith was betrayed over the several months of working with Treasurer Boozer to deliver this bridge loan to the college,” Coleman said last week. “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.”
Boozer’s statement said he never wavered from the denial based on insufficient collateral. Contrary to the statement by Coleman, Boozer has not said the college was “not a good credit risk,” but instead said it is a “terrible credit risk.”
In a statement Friday, Coleman said the school’s administration is “working nonstop to explore every option for the future of this College.”
“While we cannot disclose the details of those options, we share your sense of urgency, and we remain focused on finding a solution,” Coleman said. “Please be assured that however this situation plays out, we will do everything we can to ensure that our students, faculty, and staff are taken care of. We are lining up resources that we hope we never need, including direct coordination with other institutions to ease the transfer process.”