SAU outlines cost-cutting efforts during court hearing

RALEIGH, N.C. (WTVD) -- While many college students have returned to campus for the fall semester, Saint Augustine's University remains quiet after suspending classes for the academic term amid ongoing financial challenges.

During a bankruptcy hearing Wednesday, university officials provided creditors with an update on cost-cutting measures and the institution's proposed budget for next month. Creditors acknowledged the school's efforts to reduce expenses as it works through its financial difficulties.

The hearing also focused on a request for an automatic stay involving a lawsuit filed by the estate of former Chancellor Dr. Christine McPhail against the university and two former board chairs.

According to court discussions, the two former board chairs named in the lawsuit are no longer serving on the university's board.

During the proceedings, the judge questioned whether the university maintained directors and officers' liability insurance during the former board members' tenure and whether coverage is currently in place.

It was also revealed that litigation expenses were not included as a line item in the university's proposed budget for next month. To prevent additional costs from accruing while the matter is reviewed, the judge issued a temporary stay.

The judge directed the university's legal counsel to provide an update on the institution's insurance coverage and an updated cash collateral budget at the next hearing.

The next bankruptcy hearing is scheduled for Oct. 1 at 1 p.m. in Raleigh.

SEE ALSO: Remembering Dr. Prezell Robinson: Leader behind Saint Augustine's 'Miracle on Oakwood Avenue'