A private school on Manhattan’s Upper West Side is at risk of shutting as soon as this week after a bankruptcy judge rejected an emergency financing plan that would keep it open.
Manhattan Country School, a progressive institution that was founded in 1966, has been using next year’s tuition deposits to make payroll and borrowed from its board members to keep the lights on. The school had bet its future on a partnership with a foundation called Casa Laxmi, which offered an $8 million loan with a 12% interest rate to sustain it for the next four months.
David S. Jones, a New York bankruptcy judge, rejected that plan on Tuesday. He ruled that the school hadn’t justified its proposal that would have pushed the Chapter 11 loan ahead of is existing creditors.
“The school appears to have been run in a quite financially irresponsible manner — maybe born of desperation,” Jones said.
Without this funding, Manhattan Country School would have to close this week, said Peter Kamran, an attorney for the school. The school only has about $82,300 in cash in its bank account, according to its bankruptcy petition. The school also missed payroll on May 15, Kamran said.
Representatives for the school did not immediately reply to phone calls and emails seeking comment. Kiran Kulkarni, who runs Casa Laxmi, was not immediately available for comment.
The last-ditch financing proposal exacerbated an already tense relationship with Flushing Bank, which is owed roughly $25 million by the school and said its use of the prepaid deposits was improper. The Queens-based bank had tried to foreclose on the school’s six-story main building on West 85th Street, which court documents say is worth about $38 million. A representative for the bank did not immediately reply to a request for comment.
Alternative plan
The judge urged school officials and their lawyers to come up with an alternative financing plan. The students’ last day of school and graduation is scheduled for June 12.
“I hate the idea of families having a school go ‘poof’ on them right at the end of the school year,” Jones said at a hearing on Tuesday morning. “This is the ruling I’m compelled to make by the code and by the circumstances I’m presented with.”
Manhattan Country School — known as MCS — offers a “social justice” education that emphasizes “anti-racism and a rich, developmentally appropriate social science curriculum,” according to its website. It requires graduates to master milking a cow, among other skills taught at its farm in the Catskills and charges as much as $59,000 in annual tuition.
The school is known for having a sliding-scale payment model, which provides lower-income families with a smaller fee. That feature made the school a leader in diversity, but it also contributed to losses during the pandemic after officials helped impacted parents by reducing prices, court papers show.
As recently as Tuesday morning, a press release on the school’s website said the institution will remain open and it is currently applications and accepting tuition payments for the 2025-26 school year.
