Injunction Junction, What’s Your Function?

Injunction Junction, what’s your function?
Holding up Shank and Rice and Jones…

Now that I’ve got that song stuck in your head… (and yes, I re-wrote two stanzas down at the bottom of this page, along with the video)

Have you ever had one of those days where you thought something not so great happened, but then later realize it was totally awesome?  That happened Wednesday in the lawsuit brought by Sweet Briar students and alumnae.

The #SaveSweetBriar Twitterverse exploded with this tweet from inside the courtroom:

#BREAKING #SaveSweetBriar Judge GIVES the #punkandgreen students an injunction, a 6-month ban on selling assets.

— Hawes Spencer (@HawesSpencer) April 29, 2015

But four minutes later, the mood fell:

#BREAKING #SaveSweetBriar Judge DENIES the #punkandgreen students an injunction to keep school open. Jones can keep closing it.

— Hawes Spencer (@HawesSpencer) April 29, 2015

What appeared to be a loss in that second tweet shadowed the significance of the first part of the judge’s ruling.

Injunction Junction, how’s that function?
The judge’s orders get most of my job done

Injunction Junction, what’s their function?
They stop “selling”, “destroying”, and “transferring” assets
They’ll get you pretty far.

The judge granted a six month injunction that prevents the college from selling, destroying, or transferring any of its assets. So, they can’t sell any assets – building, vehicles, equipment, art, or land. The college had an official response which in part said “That ruling could negatively impact the value of those assets and the College’s ability to meet its obligations to students, faculty, staff and creditors”.

At first I was chuckling at that response – as if the land and buildings and endowment will lose value of the next six months. But it was not until the next day that I realized there is another critical asset the school has that by nature of the order cannot be sold: marketable securities.

Injunction Junction, your function?
I have unitentionally kept them from payin’ their bills.

I’m just like everyone else – my paycheck goes in the bank and then I pay my bills.  But unlike normal people, a college with expenses of around $3 million a month doesn’t collect all the tuition at the beginning of the year or semester and then keep it as a huge pile of cash sitting in the checking account to pay the bills (or at least I hope they don’t – that would be a failure of fiduciary responsibility). They put it in money market funds, or short term treasurys, a.k.a. marketable securities, a..k.a. ASSETS.

Injunction Junction, what the hell is your point?
The judge’s orders mean they’ll run out of cash soon

One of the most glaring missing pieces of the equation has been current financial information. The board and administration has withheld that for anyone to look at or review. They have basically said “We can’t continue financially, and you’ll just have to take our word on that.”  So here’s what is going to happen: they have to have cash to make payroll and pay the bills.  They are going to have to go to the judge and ask him to modify the order to allow them to convert securities to cash to cover operating expenses.  In order to do that, they will have to prove to the judge it has to be modified.  How do they prove it? They produce the financials, and when one side presents evidence to the judge, the other party gets it as well.

They may have been stalling on producing anything related to the college’s finances, but unless the judge gave a special exception, or if by some bizarre VA statute declares securities to not be assets, the college is going to have to produce the financials well before they ever wanted to.

That is, unless they tried to play stupid by not thinking securities were assets and liquidated enough to get them through the next two months. But that would be a direct violation of the court order, now wouldn’t it?

3:22 pm UPDATE:   Elliot Schuchardt, who represents the students and alumnae in their lawsuit, received a letter requesting Limited Relief from Injunction on the Disposition of Assets from one of SBC’s attorneys, Hogan Lovells.  It would seem they overlooked this very issue.  Oops…

Injunction Junction, what’s your function?
Holding up Shank and Rice and Jones.

Injunction Junction, how’s that function?
The court orders said that they can’t sell off assets

Injunction Junction, what’s their function?
Can’t “sell”, “destroy”,
and “transfer”

“Sell”:
That means turning assets into cash

“Destroy”
That’s like throwing away
“Shred this and that”

And then we have
Trans-fer when you move something like
“Programs to Hollins”

“sell”, “destroy”,
and “transfer”.

Injunction Junction, what’s your function?
Holding up the board to save Sweet Briar
Raise cow money, hurry and stop, Jones and Rice
Hey that’s nice!

The data was wrong, ask Gottlieb he knows,
The board needs to go, their words are not true,
They need to resign, get a clue,
Boo-hoo-hoo-hoo-hoo!

Injunction Junction, what’s your function?
Holding up Shank and Rice and Jones.
Injunction Junction, how’s that function?
The court orders said that they can’t sell off assets
Injunction Junction, watch that function.
I’m going to get you there just Holla! Holla!
Injunction Junction, what’s your function?
I’m going to get you there just Holla! Holla!
Injunction Junction, what’s your function?
I’m going to get you there just Holla! Holla!

[embedyt]https://youtu.be/ODGA7ssL-6g[/embedyt]