Defeated by a federal rule that automatically takes federal school loans away from bankrupt colleges, Texas liberal-arts school Lon Morris College is preparing to sell itself in pieces at a cash auction, Dow Jones DBR Small Cap reported today. The college's bankruptcy attorneys have begun the process of cutting off several lease agreements, including one with California First Leasing Corp . for $700,000 worth of dormitory furnishings. The college has also asked for permission to get out of contracts for its office equipment, pest control services and ice and vending machines.
