A day of mediation with a federal bankruptcy judge this week failed to break the impasse between financially crippled Windrush School and its creditors, according to school board members.

Another mediation session was set for next Tuesday, immediately prior to that day's scheduled hearing in U.S. Bankruptcy Court on Windrush's petition to remain under Chapter 11 protection, the board said in a statement composed Wednesday and distributed early on Thanksgiving. A special meeting for Windrush parents and others affiliated with the school was held at the school Wednesday afternoon.

The K-8 private school, which defaulted on its debt payments on $13 million in school bonds, is trying to stave off closure and seizure by bondholders. On Oct. 28, it announced that it had reached a settlement agreement with Wells Fargo Bank, trustee for the creditors, but the pact became snagged by disagreement over the school's budget.

With U.S. Bankruptcy Judge William Lafferty acting as a mediator, representatives of the two sides met this past Tuesday but did not achieve a resolution, according to the school's board. The session was originally scheduled only for the morning but contined until 5 p.m., the board statement said.

The board outlined three "scenarios" for what could happen next:

1. The school and Wells Fargo agree to the proposed settlement, whose broad outlines included dismissing the bankrupty case, turning the school over to the creditors and allowing the school to continue operating for at least the rest of this school year.
2. If a settlement is not reached by Tuesday's hearing, the current U.S. Bankruptcy Court proceedings would continue, keeping the school's hopes alive of remaining under bankruptcy shelter. The school is under interim temporary bankruptcy protection pending a court ruling and must convince the court that it has a viable plan for sustainable future operations.
3. If the first or second scenario are not attainable, then the school would be obliged to shut down, the board said. The board statement did not give an exact date, except to say the school would "need to ask the Court to approve a wind-down cash collateral through January 30, 2012."

If the school can realize the first or second scenario – and receive the funds pledged in the emergency fund-raising drive and continued tuition payments – the school would have the opportunity to pursue a revised academic plan called "Windrush 2.0," the board said.

"Our Windrush 2.0 plan calls for us to reorganize Windrush as an independent school for 2012-2013 school year focused on delivering a strong, focused Science, Technology, Engineering, Arts and Math (STEAM) curriculum based on Windrush's unique integrated education model," the board statement said. "The new program could initiate a Venture Academy in upper elementary and middle school to give students practical, project-based experience in creating social justice or community-benefiting ventures."

The 35-year-old school has long been known for a progressive education orientation.

It issued $13 million in bonds in 2007 to build a new middle school/library building and refurbish the gym. Enrollment was 259 students at the time but had fallen to 165 by Sept. 27 this year when the board announced that the school faced a crisis and would have to close by the end of October without a successful emergency fundraising drive. Enrollment fell further since then.

The school filed for bankrupty protection on Sept. 30.

Next Tuesday's U.S. Bankruptcy Court hearing, before Judge Lafferty, is scheduled for 9:30 a.m., Room 220, 1300 Clay Street, Oakland.

For more background on the Windrush crisis, you can see our past stories by clicking "Windrush School" next to Related Topics below this article. For alerts on future Windrush stories, click the green "Keep me posted!" button below the article.