According to the filing documents obtained by ABC11, school leaders admitted that it owes between $50 million and $100 million to creditors. The school described the move as a "voluntary bankruptcy filing" and said it hopes to "strengthen its financial foundation" over the long term.
Selling part of the school's 105-acre property in Raleigh to help cover its debt is one of the options they are looking at.
Financial records show the university estimates it has between 200 and 999 creditors, with assets valued between $1 million and $500 million. The filings also indicate the school owes $14.4 million to the Internal Revenue Service.
The university has also decided to discontinue litigation related to its accreditation status, marking a significant shift after more than two years of legal efforts to maintain that status.
When the university's accreditation expired on May 15, all students transferred.
Bankruptcy lawyer David Mills says Chapter 11 is specifically designed to allow organizations such as St. Aug's to reorganize their debt, shed themselves of unprofitable leases and contracts, and restructure.
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