Ohio Valley University’s property and buildings in Wood County and land and coal reserves in Marshall County have been placed in a receivership as a first step toward reimbursing the holders of nearly $16 million in bonds for which the closed school is in default.

Wood County Circuit Court Judge J.D. Beane granted a motion by bond trustee UMB Bank to appoint a receiver for the collateral securing the debt on the principal and interest from four series of bonds. The most recent were issued in 2007 to refinance prior bonds that funded construction on the campus, as well as the acquisition of the land.

UMB says in court documents that OVU has not made principal or interest payments on the bonds since September 2019. Facing mounting financial difficulties, the Church of Christ-affiliated school closed its doors in December. The subsequent cancellation of insurance for the campus property violates the bond covenants, court documents say.

OVU filed for Chapter 7 bankruptcy in federal court three days after UMB filed its suit, but the bankruptcy case takes precedence, according to Martin Sheehan, a Wheeling attorney representing the school. The motion filed by the bond trustee lifts the stay and places the collateral assets in a receivership managed by ABTV Receivership Services LLC in North Carolina.

Under the bond covenant, the collateral is to be placed into a receivership in the event of default. According to court documents, OVU does not oppose the order and the trustee in the school’s bankruptcy case has consented to its entry.

“They (the collateral assets) have left the bankruptcy case,” Sheehan said.

In addition to the campus land and buildings and the Marshall County coal property, the collateral includes all of the school’s “gross receipts, accounts, bank accounts, general intangibles and … proceeds, cash proceeds, cash equivalents,” the court documents say. The receiver assumes control of the property, can obtain insurance and, with approval of the court, can sell, lease, transfer or otherwise dispose of the property.

There are still some assets that belong to the school that are not in the receivership.

“There are several motor vehicles the university owns, and there’s no lien on the titles, so the (bankruptcy) trustee will liquidate them,” Sheehan said.

There have also been oil and gas interests in multiple counties throughout West Virginia gifted to OVU, he said. The value of those assets is not yet known.