A federal judge shut down Bacone College in May 2025 after court-appointed trustees discovered the acting president used college funds to repay his personal loan. The 145-year-old institution in Muskogee surrendered its campus keys, ending nearly a century and a half of educating Native American students.
The closure came nine months after the college filed for bankruptcy protection, hoping to reorganize and survive. Instead, allegations of gross mismanagement converted the case into a liquidation order.
Table of Contents
Court Filing Exposes Financial Mismanagement
U.S. Trustee Ilene Lashinsky filed a motion in May 2025 accusing college officials of improper financial activity. Court documents showed Leslie Hannah, who took over as acting president in April 2024, directed a $16,500 payment from college accounts to the Small Business Administration. The payment covered a personal loan Hannah had taken out in his own name.
Hannah told the court he borrowed $15,000 from the SBA before the bankruptcy filing to cover employee payroll. The problem: neither Hannah nor the SBA appeared on the creditor list when Bacone declared bankruptcy in June 2024.
Board member Josh Johns, listed as overseeing the institution during bankruptcy alongside Hannah, did nothing to stop the payment.
“This case is stagnant and the Debtor’s only hope is that an investor may come in and purchase the real estate assets,” Lashinsky wrote. She recommended converting the Chapter 11 reorganization into Chapter 7 liquidation. A federal judge agreed days later.
On May 21, 2025, Bacone College handed over all keys and control to bankruptcy trustees.
The HVAC Contract That Broke a College
The path to bankruptcy started with unpaid bills. In August 2020, Bacone contracted with Midgley-Huber Energy Concepts, a Utah company, to install new heating and cooling systems across campus. When the college couldn’t pay, MHEC sued in September 2021.
A Muskogee County judge ruled in favor of MHEC in November 2022, awarding the company over $1 million. With interest and legal fees, the total debt climbed to $1.6 million.
The court scheduled a sheriff’s auction for April 2023 to sell the campus and settle the debt. Hours before bidding would begin, the sale was canceled. MHEC’s attorneys discovered Bacone owed other creditors who might have claims ahead of them in line.
Another auction date was set for December 2023. That sale was also canceled 40 minutes before it started when additional creditors emerged.
MHEC wasn’t Bacone’s only unpaid vendor. Sodexo, the food service company, had sued for $1.1 million in 2020 over unpaid dining services and kitchen equipment. The college eventually settled that debt, but other lawsuits followed.
Enrollment Collapse Preceded Debt Crisis
The financial problems had roots going back more than a decade. Student enrollment peaked at 1,184 in fall 2010. By fall 2013, that number dropped to nearly 1,000. In 2018, the college enrolled about 900 students before a temporary closure that spring.
Then-president Frank Willis told the campus community in early 2018: “We’ve run out of money.” He announced mass layoffs and warned that without emergency funding, Bacone would close permanently.
The college sold property, including Bacone Commons for $2.85 million, and eliminated six sports programs. Football and wrestling teams were cut. Faculty positions were reduced. The campus reopened that fall, but enrollment never recovered.
By fall 2023, only 106 students remained on campus.
Tribal Nations Tried to Save the College
Between 2019 and 2020, several Oklahoma tribes stepped in to help. The Osage Nation, Cheyenne and Arapaho Tribes, Kiowa Tribe, and Otoe-Missouria Tribe each agreed to charter Bacone as a tribal college. The change would have made the institution eligible for federal funding under government treaty obligations to support Native American education.
The Bureau of Indian Affairs never approved the conversion. Former president Ferlin Clark, who left in May 2022 under an HR investigation, never told anyone at the college about the BIA’s rejection. Interim President Nicky Michael said she didn’t discover the denial until spring 2023.
Without tribal college status and the federal money that came with it, Bacone had no financial lifeline.
The Final Semester on Campus
By February 2024, the situation had become desperate. An Associated Press investigation found buildings infested with mold, infrastructure crumbling, and priceless Native American artworks sitting in unheated spaces at risk of damage. Only nine employees remained. Michael, the interim president, was running DoorDash deliveries to pay her bills while trying to save the college.
“If we have the money, we can pay,” Michael told reporters about staff salaries.
The college suspended classes for spring 2024. Most students transferred to other institutions. Nine students who were close to graduating stayed on. In May 2024, they became the last people to earn degrees from Bacone College.
The following month, the college filed for Chapter 11 bankruptcy. On June 27, 2024, the Higher Learning Commission withdrew the college’s accreditation for failing to meet multiple compliance standards. Without accreditation, students couldn’t receive federal financial aid, making any chance of reopening nearly impossible.
What Native Communities Lost
Bacone College opened in 1880 and was chartered by the Muscogee (Creek) Nation in 1881. The institution helped create the “Bacone style” of Native American art in the 1930s, training artists who blended traditional Indigenous themes with modern techniques. The campus museum, Ataloa Lodge, featured a fireplace built from 500 stones collected from Indigenous historic sites across the country, including stones from Sitting Bull’s grave and the battlefield where Custer died.
In its final year, the college served students from 45 different tribal nations.
Amanda Swope, Director of Tribal Policy and Partnerships with the City of Tulsa, spoke about the closure after the May 2025 liquidation order. “Bacone was really such a mecca and a well-known university in Indian Country, and for Native students in particular,” Swope told local reporters.
Campus Liquidation Underway
Court documents valued the 160-acre campus at $3.8 million. The value of the college’s art collection was listed as unknown. In October 2025, an auction in Oklahoma City sold furniture, vehicles, and other campus property to pay creditors. Student records and sensitive documents remain protected under court orders.
Eight months after the liquidation order, the Bacone College financial collapse stands complete. No buyer has emerged to purchase the campus. No institution has stepped forward to preserve the college’s mission or continue serving Native American students in Muskogee.
