Bank seeks control of Ohio Valley University’s buildings, property | News, Sports, Jobs

A water tower bearing the name of Ohio Valley University stands next to dormitories. (File Photo)

PARKERSBURG — The trustee for bonds issued by Ohio Valley University in 2007 filed suit to stake bondholders’ claim on the school’s assets and property, but a bankruptcy case initiated last week will take precedence.

UMB Bank filed the lawsuit Feb. 14 in Wood County Circuit Court, saying OVU is in default on payments for nearly $16 million in principal and interest on the four series of bonds.

The bondholders have liens on the college’s property between Parkersburg and Vienna, as well as land and coal reserves it owns in Marshall County, in the event of default, the suit said.

Facing mounting financial difficulties and the impending loss of its ability to confer degrees, the Board of Trustees of the private, Church of Christ-affiliated university decided to close the school in December. Sixteen seniors remain on pace to graduate this spring under a Teach Out Plan approved by the West Virginia Higher Education Policy Commission and the Higher Learning Commission, the school’s accrediting agency.

According to the complaint, OVU has failed to pay all principal and interest payments on the bonds since September 2019. The original trustee for the bonds was United Bank, but Minnesota-based UMB Bank has since taken on that responsibility.

Three days after UMB filed its suit, Wheeling attorney Martin P. Sheehan filed for Chapter 7 bankruptcy on behalf of OVU in the U.S. Bankruptcy Court for the Northern District of West Virginia. A trustee will be appointed to take possession of all the university’s real and personal property.

“Secured creditors have the right to get … the collateral back first,” Sheehan said. “I think that UMB is first on the buildings … and property in Marshall County.”

Although filed afterward, the bankruptcy case will take priority, Sheehan said. He said he has spoken with attorneys for UMB and anticipates the company filing a motion to have a receivership appointed to take charge of the buildings and coal reserve, which its suit says the bond documents provide for in the event of default.

According to court documents, in August 2007, OVU issued a series of taxable bonds to refinance prior bonds that funded construction of a new residence hall complex, educational building and parking facilities and acquisition of land on its campus. Two other series of bonds were issued at the same time by the Wood County Commission.

County Administrator Marty Seufer said the county allowed OVU to utilize its bonding authority, but the county is in “no way, shape or form” financially responsible for the bonds’ debt service.

Evan Bevins can be reached at [email protected].