FOR IMMEDIATE RELEASE

Contact:

Lynda Sirk
Director of Communications
Antioch College
Phone: 937.769.1222
Cell: 614.394.4070

-or-

Joanna Gerber
Director of Public Relations & Communications
Antioch University Los Angeles
Phone: 310.578.1080 x119
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Negotiations between Antioch Board of Trustees and Antioch College Continuation Corporation Reach Impasse
The Antioch University Trustees Reaffirm Commitment to Future Re-opening of College

YELLOW SPRINGS, OH - March 28, 2008 - After months of exhaustive talks with the Antioch College Continuation Corporation (ACCC) regarding the potential transfer of Antioch College to an independent alumni-controlled corporation, the discussions between Antioch University and ACCC have reached an impasse. The University Board met again on Wednesday night for an extensive discussion about the last proposal presented by ACCC. Much of the proposal was found to be acceptable to the Board. However, after hours of deliberation and debate, the Board concluded unanimously that some of the terms of the proposal created unacceptable risk to the University and could not be accepted and that the plan was not viable. ACCC failed to provide adequate security for $6.2M of the purchase price. Since Wednesday, the board’s negotiation team attempted to explore alternatives to the ACCC proposal but have been unsuccessful.

This development does not affect Antioch University Los Angeles or any of the other Antioch University non-residential campuses located in Yellow Springs, OH (McGregor); Keene, NH; Santa Barbara, CA; and Seattle, WA or its national PhD program in Leadership and Change – all of which are strong and growing. Antioch University Los Angeles will continue to operate with no interruption. Dr. Neal King, President of Antioch University Los Angeles joins all the other campus presidents in their united support of the rebirth of Antioch College in Ohio.

Regarding the impasse between the Antioch Board of Trustees and the ACCC, Art Zucker, Chairman of the University Board of Trustees stated, “We are deeply disappointed that the negotiations process we have been engaged in over the last several weeks has not resulted in an agreement. To have worked this hard – and be this close -- and not reach agreement is truly heartbreaking. It is particularly frustrating since we had a viable agreement in November with the Alumni Association which would have allowed the College to continue operating. That agreement was then nixed by several major donors who now comprise the board of ACCC.”

Of the several critical issues outstanding, the most important one is payment: ACCC proposes to pay only about half the purchase price at closing. The rest is proposed to be paid in installment over 5 years.

In the negotiations with ACCC, the Trustees negotiating team were willing to accept the $12.2M price offered by ACCC for the assets. “This price is less than one-third the fair market value of the assets,” said Chairman Zucker, “but we are willing to accept that price to allow ACCC to continue the educational mission of the College.”

“Despite our major concessions, ACCC has been unwilling to meet our needs to have the consideration paid entirely in cash at closing,” said Bruce Bedford, member of the University Board of Trustees and the Chairman of the board’s Finance Committee. “Instead, the directors of ACCC have insisted that only $6M would be paid at closing and the remaining $6.2M would be paid in installments over 5 years, perhaps secured by a mortgage on the real estate.” According to Bedford, this installment payment arrangement would likely not be acceptable to the University’s creditors which must ratify the terms of any deal.

“If ACCC had to default on the loan payments, the University’s only remedy would be to foreclose on the real estate. It’s impossible to imagine the University putting Antioch College on the auction block at a Sheriff’s sale,” said Bedford, “and for that reason, it’s simply not practical.”

“We have been clear throughout these discussions that any deal would have to be in cash at closing and approved by our creditors,” said Toni Murdock, University Chancellor. “The stalemate on this issue is troubling especially after reaching agreement on the more difficult issue of the purchase price. The University”, she added, “is simply not able to act as ACCC’s bank. It is reasonable and necessary that they obtain their own funding or financing. They claim to have raised $18M and to have the ability to raise $100M in the short run.”

The other sticking point relates to ownership of WYSO. ACCC, as part of its $12.2M offer, is also demanding to acquire WYSO, the University owned NPR radio station which has not been part of the College operations for many years. It has been the University’s position that it is to retain ownership of WYSO, with access by the College for educational use. This is a reasonable solution which meets the needs of both parties.

There have been many alumni who have questioned why ACCC should pay anything for the assets. “There are many reasons,” pointed out Chairman Zucker:

(1) There is a common misperception that the assets already belong to the College. The University owns the assets. They are not the property of alumni or any alumni group including ACCC. There is, and always has been, only one corporation, now known as Antioch University, and formerly known as Antioch College. The corporation’s name was changed in 1978, but all assets are owned by that same entity incorporated in 1852.

(2) In addition, of course, the University is responsible for all the debts and liabilities. Among these obligations are several substantial bond issues. The transaction with ACCC contemplates the University transferring substantial assets to ACCC while retaining virtually all of the debt. This obviously creates a huge negative impact on the University’s balance sheet. If ACCC were assuming a proportionate amount of the University debt along with the assets, the cash consideration to be paid for the assets would be less of an issue.

(3) The College voluntarily created the University. The decision by the College in the late 1960’s and early 1970’s to propagate the Antioch experience beyond the geographical boundaries of Yellow Springs, Ohio is as much a part of the College’s heritage as the buildings on Livermore Street. Suggestions that the College was the
victim, and not the architect, of this metamorphosis is historically inaccurate and revisionary. While many alumni may not have agreed with the decision, it was nonetheless the voluntary decision of Antioch College at that time to so proceed. It is, therefore, unreasonable to expect the University to turn back the hands of time and turn over to ACCC, or any alumni group, a pre-University era College insulated from the liabilities of the University. The College and the University are legally one.

(4) The College has benefited from the University structure. With the decision to expand, the other operating units of the University have heavily subsidized the College operations. Those budgeted subsidies in recent years have been approximately $740,000 annually. In addition, there have been large unbudgeted operating deficits of the College which were covered by the other campuses. Those expenditures of accumulated reserves have limited the ability of the other campuses to grow and compete in their local markets and have required that they borrow to acquire and build adequate facilities. Much of the current debt, while attributable to other campuses, was incurred because those campuses depleted their reserves to prop up the College.

Last June the Trustees voted to suspend operations for up to four years until a viable plan for reopening a reinvigorated state of the art institution could be developed. It is a decision which was later validated by the independent review of consultants working for the Antioch College Alumni Association. Prior to its June 2007 meeting, the Board spent hundreds of hours working in teams, individually and with outside national experts dissecting the finances of the College and considering reasonable alternatives. But the Board and University leadership decided none offered long-term financial viability or provided the level of educational experience and opportunity Antioch students deserve.

“Regardless of this impasse with ACCC, the Trustees are committed to the future re-opening of Antioch College,” stated Zucker. “Given the extraordinary efforts made by the Board and the substantial discussions the Board has had with various segments of the community, going all the way back to the special board meeting in August, the regular board meeting in October and the numerous efforts by the Board and the University management to work with all stakeholders, the impasse in discussions with ACCC is extremely disappointing.”

Chairman Zucker continued, “The Board has shown remarkable flexibility in its willingness to find creative alternatives and solutions for the College. Those efforts included working out Agreements in Principle with the Alumni Association which would have resulted in the uninterrupted continuation of College operations. When that Agreement was repudiated by several major donors, the University Board diligently evaluated the feasibility of transferring assets to an independent entity and worked tirelessly with ACCC on the terms and conditions of a transaction which, if it had closed, would have afforded to the College a promising future and the University only a modicum of comfort going forward. But we cannot agree to a transaction with ACCC that threatens the viability of the University. The Board of Trustees has moral and ethical responsibility for the five other campuses and their over 200 faculty and 4,000 students.

Quoting from a recent speech by presidential candidate Barack Obama, Art Zucker said, “...we cannot solve the challenges of our time unless we solve them together.”

Antioch University Los Angeles, located in Culver City, is committed to continuing to provide an innovative, reflective and experiential approach to educational excellence that is at the heart of the Antioch experience.

For more information, please contact Joanna Gerber, Director of Public Relations for Antioch University Los Angeles at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or at (310) 578-1080 x119.

Additional information on the Antioch University system can be found online at www.antioch.edu

Additional information on Antioch University Los Angeles can be found online at www.antiochla.edu .

Click here to download the full text (PDF) of this release