Afederal bankruptcy court judge Friday approved United States International University’s bailout plan to pay its creditors all of what they are owed.
The university’s reorganization plan, which it had filed with the court in May, includes the sale of its prestigious London campus as well as 57 acres in Scripps Ranch in an attempt to pay off a debt estimated by its creditors to be as high as $30 million.
“The assets being sold don’t impact academic quality at all,” said David Osias, the university’s attorney, because the Scripps Ranch property is undeveloped and the London campus “is gorgeously beautiful, but beyond what we need to be a successful international university.”
The plan gives USIU until July, 1994, to pay off its estimated 3,000 creditors, Osias said.
Among those creditors are Mission Federal Credit Union, which is owed $4 million, Lippobank, an Indonesian-owned San Francisco bank owed $2 million, and professors and other employees whose unfunded pension plan payments total $3.5 million.
A majority of creditors earlier this month voted to approve the plan.
The three-year plan proposed by the troubled university, which filed for bankruptcy in December, 1990, is also an integral part of the institution’s effort to retain its academic accreditation with the Western Assn. of Schools and Colleges.
Last July, the association upgraded the USIU’s standing from “show-cause” to “probation,” saying the university had made significant progress toward financial reorganization, but added that improvements still needed to be made regarding the university’s doctoral-level instruction, its number of full-time professors, its library resources, overall academic quality and long-range academic planning.