Mar 11, 2014 05:35 PM EDT By Jaleesa Baulkman, UniversityHerald Reporter

A Bethlehem, Pa. company that provided services such as food and budget management to fraternities and sororities at Lehigh University is no longer offering those services, school officials announced Monday.

Fraternity Management Association, which has contracts with 15 fraternities and sororities at the private institution, informed the university last week that it was suspending services. The suspension will be a major disruption to the Greek life, affecting about 800 students and numerous area food service vendors who are owed thousands of dollars, The Morning Call reported.

The company operates independently from the university.

"While the contracts between the fraternities and sororities fall outside of Lehigh's legal purview, the university understands that this sudden development regarding FMA's financial issues places a significant burden on the chapters and students," Sally Gilotti, assistant director of media relations for Lehigh University, told The Morning Call.

FMA, which has independent contracts with 13 fraternities and two sororities, acted as a financial services company, providing food service and accounts received/accounts payable (billing and collection of payments).  The company would bills students and parents prior to the start of each semester. Depending on the chapter's contract with FMA, that bill could be for food services and/or chapter fees to support the functions of the chapter.

The status of FMA is unclear. Northampton County District Attorney John Morganell told The Morning Call that his office received a phone call Friday with news that the company has shut its doors and would be filing for bankruptcy.

"Unless there's more to it, we didn't see there was anything we could do about it," Morganelli said. "At the moment, we have no basis to go into the matter, so we'll have to see what develops on this."

Lehigh University is providing affected students with 14-meal-a-week dining plans through the remainder of the semester.

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