Within the last two weeks, two companies sued Saint Augustine’s University for not paying its bills.
These lawsuits, filed about a week apart, total more than $18 million. They come about a month after St. Aug’s accreditation was revoked because it could not prove financial stability and proper oversight.
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Wireless company SBA Connect claims the university went into default of its agreement in September, just over a year after starting business together. The lawsuit gives several options for compensation. The first option is to pay the early termination fee of $16,860,597.50 plus interest.
That lawsuit prompted IT company Avaria to also take legal action, according to the company's attorney Byron Saintsing. The Avaria lawsuit alleges that the historically Black university has paid some, but not all, of its bills dating back to 2020. According to the lawsuit, St. Aug’s owes Avaria $448,067.33 in late bills and $884,520 for the remainder of its contract.
Saintsing said Avaria is still providing services to the school despite taking legal action.
"It's a tough line, particularly when you're trying to be supportive of the university, where you draw that line between being supportive and continuing to offer services versus protecting your own pocketbook," Saintsing said. "In our particular case, the services that are being provided are pretty crucial to the university. It's basically a lot of the IT infrastructure. If they were to pull the plug on that, it would make a very bad situation even worse."
The university previously said it secured a $70 million bridge loan but did not disclose the terms of the deal or the partner(s) providing the money. It said that deal would be closed by the end of March.
“The bridge loan of up to $70 million provides SAU with the financial resources to eliminate past debt, invest in campus improvements, and implement its long-term strategic plan,” according to a March 6 news release.
WRAL asked the university about the status of the deal and why it still seems to be struggling to make payments, if the deal has gone through. We have not heard back.
"The end goal would be to, hopefully, continue to support the University and the University finds a solution that ends up paying everybody what they're owed... and that they'll be able to pay the debt," Saintsing said. "If things don't go well, unfortunately, the the assets of the university may get liquidated, and creditors may or may not get paid as a result of that liquidation."
Court documents show that pending litigation is a continued obstacle for the school.
According to a recently reopened lawsuit, landscaping contractor Management Professionals, Inc. has placed a levy on the university’s account for $1.3 million plus daily interest payments of $228.65.
The university is asking the judge not to enforce the levy, with an emergency motion to stay.
“Its enforcement will create obstacles to SAU satisfying outstanding debts, exacerbate institutional disruptions and further erode the public’s confidence in SAU’s viability as a historic institution of higher learning,” the university’s attorney wrote.
The school is currently fighting for its accreditation; a large part of that is proving financial stability.