New Jersey - Big Debts Close Small Jewish School in Lakewood
Lakewood, NJ - By the winter of 2008, Bais Yaakov Elementary had all but crumbled. In debt to the Internal Revenue Service for nearly half a million dollars and delinquent on its mortgage, the girls’ school of about 65 students stood almost solely on the crutches of last-minute donations.
At its height, the school had both boys’ and girls’ elementary programs and a 160-student preschool. The building on downtown Fifth Street now is shuttered after more than 50 years, with a court-appointed trustee deciding how to liquidate $4.1 million in assets.
How it got to this point, according to at least one school official, was through toxic blend of economic woes and the hardship of operating a small, tuition-based school in a town packed with hundreds of larger ones. A private school leader said he knew of only one other school in the Orthodox Jewish community that was near closing recently, before its head rabbi resigned and new leadership took over. A call to the school, Nesivos Ohr, was not returned.
“It’s very difficult to run a small school like this so that it’s economically feasible,” said Joseph Fried, Bais Yaakov’s former school board president. His two daughters now are being homeschooled as a search for placement elsewhere continues.
But there also were the politics, lawsuits and backbiting in pursuit of control.
Court papers reveal that, starting in February 2007 and stretching over two years, a power struggle emerged between two camps that played out in several lawsuits alleging, among other things, fraud, mismanagement and rigged elections. The lawsuits cast blame for the closure of the boys school and preschool and resulted in coups and restraining orders.
The “common thread,” the school stated in a bankruptcy action plan filed in November, “was a dispute between two competing visions of how to deal with the massive financial problems of the Debtor.”
The camps consisted of one led by Rabbi Shmuel Tendler â head of Congregation Sons of Israel, which has longstanding ties with Bais Yaakov â and the other by the school’s later investors, namely Frederic Todd, Menachem Kantor and Eliyahu Weinstein.
Isaac Braverman, a Tendler supporter, in early 2007 sought through a rabbinical tribunal and secular court to block a loan the school board was securing to pay off the IRS. This led to court scrutiny of the school’s finances and eventually new school board elections that brought Tendler’s people in. The Todd camp fired back in April 2008 by suing the board for back payments and asking the court to “terminate its (the school’s) operations.”
Another election was ordered. Power shifted once again. And the following months brought more court filings, including Tendler’s attempt to block the August 2008 Chapter 11 filing, followed by complaints accusing Tendler of fraud, election tampering, allowing a pregnant employee’s health insurance to lapse and refusing to return Torah scrolls worth $75,000.
Messages left with Tendler, Braverman, Todd, Kantor and Pollack were not returned.
Yet Tendler’s opponents are not without controversy. Weinstein, a 34-year-old real estate investor and major contributor to Bais Yaakov, has been accused in several lawsuits of bilking millions from investors across six states. Attorneys have alleged he is hiding his assets in charities.
Gary Ginsburg, Weinstein’s attorney, said there was “no truth” to the hidden asset claims, and said Weinstein denies the allegations in the pending lawsuits.
Amid the infighting, teachers and administrators pleaded with the judge to keep the school open.
“Our children will not be accepted to the various schools here, and will certainly not succeed if they do,” Principal Baila Stefansky wrote in a July 9, 2009, letter. “Many are from under-privileged homes, and/or poverty-stricken. They will be in the streets with the Dayschool.”
In November, as a last-ditch effort, the school told the court it would use an $800,000 refinanced mortgage loan to repay the bank and government.
But the loan fell through and creditors kept coming.
On Feb. 18, after 1 1/2 years in Chapter 11 and with more than $1 million in liabilities, the school was closed indefinitely. Some of those involved say it could reopen, if only someone with deep pockets would buy it.
On March 8, a judge approved the appointment of a trustee. That night, the school’s leaders gathered to discuss where, in a private-school system already dealing with space issues, the girls could be placed. In the meantime, the families, students and teachers have been on their own, forming study groups or homeschools. But Fried remains optimistic.
“Being out for a few weeks is not something you can’t recover from,” he said. “It’s a big deal, but not the end of the world. It’ll work out in the end.”
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