(Bloomberg) -- The University of the Arts, the private college in Philadelphia that abruptly closed its doors in June, faces a demand by its bondholders for immediate repayment of more than $50 million in debt.
UMB Bank N.A., the trustee for bondholders, said in a regulatory filing on Wednesday that it sent the school a “notice of events of default, acceleration and demand for payment.” Under an acceleration, bondholders can call for the debt to be paid instantly.
A spokesperson for UMB Bank declined to comment.
The closure of the school, founded in 1876, came as a shock to students, parents and staff and spurred protests. The school had a student-faculty ratio of 7.5 to 1 and offered degrees such as a master of music and master of fine arts, according to its website.
Enrollment dropped precipitously leading up to the closure, with the number of full-time students falling to about 1,100 in the 2023-24 school year compared to 1,800 in the 2019-20 year, according to a regulatory filing.
In June, Fitch Ratings downgraded the university to C from B+ after the school announced it would close. The next scheduled bond payment is an interest payment due on Sept. 15, Fitch said in its report.
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