Thursday, August 9, 2012

Harrisburg University "technically" defaults on bond payments

On Aug 8, 2012 the Patriot-News reported "Harrisburg University's trustee says 'technical default' caused by failure to make early debt payment." Harrisburg University has failed to meet their obligations regarding bonds again. HU has failed to meet their financial obligations because apparently Interim-President Eric Darr thinks the terms HU agreed to are "ridiculous." The terms:

HU Bond Limited Offering Memorandum Page E25

Darr claims that in the past, under the university’s arrangement with its former trustee, T.D. Bank, it was not required to make the advance payment as long as it made the payment on time. A report from Roxbury News in May of 2012 seems to contradict Darr's claims:

 "...on January 6, 2012, Dauphin County Commissioner Chairman Jeff Haste and Harrisburg University's Vice President of Finance/CFO Duane Maun received a letter from TD Wealth's Vice President Joan Wallett's informing the parties that per the Guaranty Agreement and the Credit Support Agreement, TD Wealth was giving the Guarantor Dauphin County the required 55 days notice of the need to transfer its obligation of $1.5 million into the debt service account since Harrisburg University was deficient. Unwilling to adjust its conditions, TD Wealth stated it expected the funds to be deposited no later than 3 days before the March 1st due date."

In other words, TD Bank was going after the guarantor (Dauphin County) 55 days before the due date, because those were the terms of the agreement. It does not appear that TD bank altered the terms of the bond agreement as Darr claims.
HU students - got something to say? The press would like to hear your story. Drop me a note if you want your voice to be heard.

1 comment:

  1. On which they incurred a penalty it is presumed. But they can reverse that technical default if the prime is reconciled and debt payment is insured for a re-agreement.