Westside private school files Chapter 11

A Westside private school has filed Chapter 11 in an effort to repay a nearly million dollar debt.

Eagle’s View Academy, on Ramona Blvd, entered the initial court filing last month. The debt to the IRS dates back to 2008 when, during the recession, the school tried to continue allowing students to attend even if their families were struggling financially.  EVA Administrator Scott Kinlaw, who declined a recorded interview, says when they decided not to pay payroll taxes at that time, in order to continue to allow all students to attend, they hoped the IRS would show some leniency on repayment because so many people were dealing with the same problem.  They were losing students because parents couldn’t afford to send their children, and the overall income level of the school suffered.

Kinlaw tells me they found no leniency, however, in forming a repayment plan without mounting interest and penalties.

In 2010, he says the school began to really recover and grow, both financially and in the student body. A letter sent to parents explaining the filing says since that time they have not accrued new debt. They continue to struggle to pay off the 2008-09 debt to the IRS along with the associated penalties, however, and Kinlaw says they’ve exhausted options other than Chapter 11.

He says it is important to the school to repay the money owed, and the Chapter 11 will allow that through a structured plan that will not include more interest.  Further, he says the filing will lead to changes mostly behind the scenes- including putting in a new Board of Directors and augmenting their internal financial structure.

All of the changes resulting from the Chapter 11 and the process of the filing itself will not impact the teachers, students or day-to-day operations of the school, Kinlaw says.

He tells me this is a somewhat embarrassing time for the school because they are going through this publicly. He thinks it’s nonetheless an important step in not just getting above this debt, but building the financial strength of the school moving forward and showing the community that EVA is here to stay.

EVA is hosting a discussion on this topic Friday, Oct. 11 in the school gym from 6:30-7 PM.