FREDERICKSBURG, Va. (AP) - State Fair of Virginia officials say that more than $1 million in scholarships awarded to high school students could be in jeopardy.
SFVA President Curry Roberts sent about 500 letters to parents recently explaining how the non-profit's Chapter 11 bankruptcy filing could affect money that's been promised to their children. Roberts says that despite clear language that segregated the scholarship assets from other money pledged as collateral for its loans, its lenders are trying to seize those funds.
Attorneys Michael Mueller and Christine Myatt, who represent the SFVA's largest lender, ArborOne, could not be reached for comment.
But another lender, Farm Credit of the Virginias, issued a statement Friday saying the claim is inaccurate, according to the Free Lance-Star.
"No one knows at this point what the impact of that bankruptcy filing will be for the scholarship program, the scholarship winners or the many others to whom the State Fair has made promises," Farm Credit said on its Facebook page. "The bankruptcy process is in its earliest stages and will need to take its course."
The State Fair's website says that since the scholarship program's inception in 1989, it has awarded 2,439 scholarships, dedicating more than $1.8 million toward for post-high school education.
Elizabeth Nixon, a student at Eastern View High School in Culpeper County, is counting on the $3,000 scholarship she won last year to study agriculture at Butler County Community College in Kansas.
Her mother, Kim, received one of the letters in the mail, and it has been a hot topic in her household.
"I was very shocked because we were told the funds would be safe and available," she said. "Now, I think there's just a lot of confusion."
The next court appearance for the State Fair of Virginia will be Feb. 14 for a status conference hearing at the U.S. Bankruptcy Court in Richmond.
Information from: The Free Lance-Star, http://www.fredericksburg.com/
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)