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Crisis at Windrush School: Threat of Imminent Closure

One of El Cerrito's well-known private schools, Windrush, is threatened with closure in a month because of a large bond debt and enrollment drop. The school plans to file for bankruptcy as school supporters mount an emergency fund-raising drive.

Editor's note: This article – our first on the Windrush School crisis – has been updated with a list at the top of all the subsequent articles we've published on the subject, with the most recent on top:

2012:

Aug. 1: New Windrush Lawsuit Filed by Bondholders

July 29: 

June 8: 

May 5: Windrush-vs.-Wells Fargo Showdown Averted at Last Minute

May 3: 

April 28: 

April 22: 

March 24: Windrush Closing at End of School Year – Celebration of School History Planned

Feb. 29:

Feb. 9: Windrush Still in Legal Limbo, Hearing Postponed

Jan. 27: New Peril for Windrush? School Must Close, Bank Tells Court

Jan. 26: Disputed Pact with Windrush Head Wins Conditional Court OK

Jan. 5: Judge Balks at Departure Deal for Windrush Head of School

Jan. 4:

2011:

Dec. 7:

Dec. 1:

Nov. 29: Windrush Hearing Postponed, Talks May Resume

Nov. 25:

Nov. 11: Windrush Fate Still Unsettled, Hearing Inconclusive

Nov. 7:

Oct. 29:

Oct. 25: New Details On Windrush Woes Emerge in Hearing

Oct. 23: Windrush to Face Creditors Inquiry Monday

Oct. 10:

Oct. 7:

Oct. 4, 5:53 p.m.:Bank Says Windrush Hid Cash, Judge Sides With School for Now

Oct. 4, 3:11 a.m.:

Oct. 1: Frustration with Windrush Leadership Aired at Parents' Meeting

Sept. 30, 2011:

El Cerrito's 35-year-old is threatened by imminent closure because of an inability to continue paying a bond debt, school officials confirmed today, Wednesday.

Parents, staff and trustees of the K-8 private school have launched an emergency fundraising drive, and the school plans to file for bankruptcy in the next few days to provide protection against creditors seizing school assets, said Nina McDonald, vice chair of the board of trustees.

School staff and parents were informed of the crisis in meetings late Tuesday, McDonald said.

The progressive education-oriented school occupies an expansive four-acre, hillside property at Elm and Hill streets that once housed the , an orphanage for Chinese boys founded in 1923. Windrush held a 35th-year celebration on Sept. 6.

A letter from the board of trustees sent this morning to "Members of the Windrush Community" said the school will "almost certainly" have to close by the end of the school year in June if not sooner, possibly as early as Oct. 28.

But in an interview with Patch, McDonald said the response since the letter went out has raised new hope for keeping the school open beyond the school year.

However, the hard reality is that the school still needs to raise more funding in a short period of time to avert closure on Oct. 28, the trustees' letter said. The school has an open house scheduled for Oct. 29.

"If we cannot raise the amount needed to fund operations through the end of the school year, then the Board has no choice but to close the school as of October 28, 2011," the letter said.

The trustees estimate the school needs to raise between $800,000 and $900,000 to stay open until June. And it needs to have pledges for that amount by Oct. 7 in order to avert an Oct. 28 closure, the letter said.

The crisis has already generated $241,000 in pledges, McDonald said.

"The fact that we've been able to raise that much and the enthusiasm for doing it has really felt good and made this seem possible," she said. "They (members of the school community) made it clear right away how much it means to them and how much they love Windrush."

The trustees' letter traced the crisis to the $13 million bond debt incurred in 2007 for a new middle school building and refurbished gym. The school's enrollment stood at 259 at that time, with the expectation of future increases, enabling it to pay the principle and interest on the debt, the letter said.

However, the letter continued, "the recession and continuing economic challenges" caused enrollment to drop to 165 since then. When the trustees realized they couldn't make the July 2011 and January 2012 payments, they entered into negotiations in May with the bondholders seeking "a forbearance agreement that would suspend the school’s obligation to pay interest for some period of time and/or to restructure the bond debt," the letter said.

After months of negotiations, it became evident last week that the bondholders would not agree to terms that the trustees believed were necessary to maintain school operations, McDonald said. The bondholders informed the school that they will seek court appointment of a receiver to take control of the school's assets. The school's property is the collateral for the loan.

McDonald said she could not identify the bondholders at this time.

To avert loss of the school's property to a court-ordered receivership, Windrush will file for "relief and protection under chapter 11 of the Bankruptcy Code.  This filing will immediately stop the bondholders’ receivership and foreclosure efforts, and will provide the school with a respite in which to plan a resolution of its debt issues, either through a wind-down of operations or a feasible restructuring of debts in a manner that will keep the school operating through the school year," the trustees' letter said.

"We believe that we can raise the $800,000 to $900,000 needed to complete the school year from our community for a number of reasons," the trustees' letter said, noting that more than $500,000 was raised last year through such efforts as the Harvest Fair, the Annual Giving campaign and the Gala.

Those who would like to contribute or obtain more information can contact the school's director of development, Ann Root, at aroot@windrush.org or through the school's main number, 510-970-7580, McDonald said.

upptick December 14, 2011 at 01:25 AM
Yes, you're right, I am uninformed about it, and I didn't mean to be mean. I was just struck by the irony of trying to prop up a failing institution and entrusting your children to the same people, apparently, who caused the failure. Sorry if I offended.
Ira Sharenow December 14, 2011 at 04:43 AM
Is the WR-WF agreement available online anywhere? Is there a financial intermediary who will hold tuition and donations as a way of reducing risk? In the event of the close of WR, can the eighth graders and others hire their teachers and rent rooms at WR or elsewhere? Was there a board meeting this evening? One is listed at the school’s site?
Ira Sharenow December 14, 2011 at 04:44 AM
Others share your view and have expressed it on these pages.
Deborah December 14, 2011 at 05:12 AM
Thank you, upptick for responding. The idea of getting different people to lead appears paramount in most comments here (and in all the articles on this topic). The huge change in board membership will hopefully help. I also believe most parents are entrusting their children to the wonderful teachers at this school. Those are the people, not the administrators, who have the most interaction with the students, guiding them, supporting them, etc. I also hear a strong desire to keep all the good aspects of the school if possible. Perhaps it is all too little too late, but at least it's finally moving in a positive direction. And I fully support each parents' decision for their child... whether to stay, or leave and when to leave. It is a very difficult position to be in, and I don't judge those decisions at all.
Still Very Concerned December 14, 2011 at 06:47 AM
Not sure if the agreement is available yet. It seems that the Board will be meeting every Tuesday for awhile to keep informed about the latest information. There is not a financial intermediary as you mentioned. Everything goes directly to the school account. Your comment about the possibility of closure and classes moving somewhere else, makes me think you know more than I thought, especially since you mention the 8th grade class....Why that class in particular? Parents can move to another place, as they are able or organize. That's their own choice. I think most folks who are still here are here because they want the school to stay open until June. I agree with Deborah though about not judging parents in their decisions for their child.

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