Windrush Wins Court Case; Trims Staff, Classes

El Cerrito's beleaguered Windrush School averted a threat of forced closure today, Wednesday, when Wells Fargo Bank at the last minute withdrew a court motion seeking to close the school, thus avoiding .

As a result, a U.S. Bankruptcy Court judge removed the school's bankruptcy status, clearing the way for the private K-8 school to complete the school year, provided it cuts costs sufficiently and meets the terms of a that would turn the school property over to its creditors at the end of the school year in June.

The school earlier this week announced it is cutting some staff, reducing hours for others, consolidating some classes and reducing hours for special programs.

"We expected the outcome," Windrush board Chair James Ough said as the parties left the Oakland courtroom this afternoon. "I'm hopeful we can move forward in good faith with Wells Fargo to work out the settlement agreement and finish out the school year."

Asked about plans for the next school year, 2012-13, Ough said he's been focused on the struggle to keep the school going the rest of this year and indicated that it would be difficult for the current Windrush legal entity to continue next year. He said some members of the school commmunity are exploring options for a continuing school, possibly under a new name.

Background

The  school defaulted in June on debt payments for $13 million in school bonds issued in 2007 to build the new middle school/library building and refurbish the gym. Windrush had 259 students at the time, a figure that had fallen to 165 in late September of this past year when the unless it could raise at least $800,000 in emergency pledges.

Though enrollment continued to fall, standing at 110 as of Jan. 31, and allowed the school to keep the doors open under interim bankruptcy protection.

Wells Fargo Bank, trustee for the creditors who hold the bonds, was seeking seizure of the school property, which was collateral for the debt. It sued in Contra Costa County Superior Court in August to foreclose on the school, and the school in September to avert a seizure and shutdown.

As the two sides battled in U.S. Bankruptcy Court over whether the school could remain under bankruptcy protection, Windrush and Wells Fargo – with the mediation and urging of Bankruptcy Court Judge Willam Lafferty – reached a that would allow to school to finish the year if it met certain conditions and the turned the school property over to the creditors.

On Jan. 25, however, Wells Fargo filed court papers saying Windrush had failed to meet financial reporting requirements of the settlement deal and asked the court to order that the school be shut down.

Today's hearing

After the bank withdrew its objection today, Judge Lafferty granted Windrush's motion to dismiss the bankruptcy status and allow the school continue operating under its agreement with Wells Fargo.

The apparent end of the bankruptcy court battle doesn't necessarily mean the end of court action by Wells Fargo. It can still pursue litigation in state courts if it chooses, though no indication was given that it might do so.

The attorney for Windrush, Merle Meyers, said Wells Fargo withdrew its motion after the two sides agreed on documentation that had not been finalized, including an executed quitclaim deed and escrow agreement.

Court papers filed by the bank for today's hearing in U.S. Bankruptcy Court said Windrush had failed to supply not just required financial reporting documents but also the executed quit claim deed and escrow agreement.

Classes, staff trimmed

The school meanwhile is struggling with new program and staff cuts in order to remain financially able to finish the school year. The last day for the departing head of school, Ilana Kaufman, is today, instead of March 15, according to school's acting new director, Dana Rosenberg.

Since the crisis broke, Kaufman's leadership and recent compensation have been sharply criticized by a number of parents and some staff, while a few members of the board have spoken in her defense or in defense of the compensation agreements. She has declined Patch invitations to comment.

The school's admisssions director, David Bond, and the head of the middle school, Edward Mercer, are being laid off, as is the part-time after-school staffer Lovage Sharrock. Several teachers' hours are being reduced, including those in PE, music, art and Spanish.

The two kindergarten classes are being combined into one, and third and fourth grades are being combined. It was also announced that the sixth grade, which has only three students, would be combined with the seventh grade, but Ough said the three sixth graders are withdrawing from school instead.

The staff reductions take effect tomorrow, March 1.

Celebrating the school's history

Ough said he hopes the progressive education-oriented school can devote the remainder of the school year to appreciating its past and legacy.

"One if the things we are planning to do is focus on celebrating the 35 years of great education we've had," he said. It can be an opportunity "to feel we've successfully completed an era with dignity and to give it the respect it deserves," he said.

"It does have a great history," he added, "and now we can celebrate that."

Windrush occupies a prominently located, four-acre hillside property at Elm and Hill streets. The architecture and interior design of its adminstration and elementary school building feature a distinctive Chinese influence, owing to its origin as the , an orphanage for Chinese boys founded in 1923.

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 "Keep me posted" button below the article. We've also posted a list of all Patch stories on the Windrush crisis at the top of our original article, "Crisis at Windrush School: Threat of Imminent Closure."