Saturday, June 30, 2012

Byrnes Closing: Latest News

First for those who haven't read it, a slightly less flattering news story on Byrnes' closing.

http://www.carolinalive.com/news/story.aspx?id=770337

 Looks like they couldn't get a comment out of Byrnes as to why they were closing.  Also, we get a better timeline here from Trinity who says they began integration talks 3 weeks ago (maybe when they ran out of money?).  Summers have always been tough for Byrnes -- when they had spent all the prepaid tuition but hadn't started collecting fall tuition -- and they would even fail to make payroll or pay insurance premiums.

So what was different this time?  The bankruptcy settlement clearly stated that any default in payment would result in FC taking over the property, and Byrnes waived their right to future bankruptcy protection.  Clearly this is what happened and we warned of this possibility a year ago.

In other news, Byrnes' athletic director looks confirmed to be the new head of the athletic program and Trinity's current coach will remain on staff as well.  No word on whether he keeps his same salary that was 2-3x what other teacher made.

So far we can't find any confirmation that any other Byrnes upper school teachers have been offered positions.  We're still awaiting word on the 6th grade.  It's almost certain that Clanton will stay since her husband is on the board.  There will be at least one other slot and it's still unclear who will get it.  Either Geddings or Winstead, the current Byrnes headmaster will get it (her husband is also a board member).  There are no admin positions available at Trinity and they just announced a new outside hire for director of academics a few days ago, so if she is going to have a role in the new school it will have to be as one of the 6th grade teachers.

Anyone with updates is encouraged to post here in the comments.

Wednesday, June 27, 2012

Byrnes Schools Closing

Well, it happened.

We wrote extensively here about the mismanagement and financial problems at the Byrnes Schools.  We chronicled their bankruptcy case and used the opportunity to peer into their records and see just how poorly managed it had been.  Despite the deal worked out with First Citizens, nothing was done to change the underlying issues.

Like many others, we were not suprised to read the story of Byrnes closing and working out an arrangement with Trinity to take its upper school students, a few faculty, and a few board members.  The article in the local paper was kind in its wording, but Trinty's headmaster made it clear in his statement that this is no merger. 

We continued to follow Byrnes' financial records until they were no longer required to file them with the court.  It was unclear how they were going to remain solvent in the spring.  They would certainly get an influx of capital from families that prepay, but it would not be enough to pay expenses through the summer and into the fall.  There were probably attempts to find a bank willing to loan them the payoff value on their note with FC, but apparently none were willing.

So what now?  Byrnes faculty and staff are SOL save for the well-connected few.  Coincidence that the new Trinity-Byrnes school will be adding only 6th grade, the grade taught by the wife of a board member who will undoubtedly get a position at T-B?  The athletic director will have a position too, though maybe not at the outsized salary he commanded at Byrnes.  The paper reported that some board members from Byrnes would join the new school -- our guess is that it will be the same people who wrote those $100,000 checks to prop of Byrnes right before the bankruptcy.  Look for Isgett, Goodman, Clanton, and maybe one more to be a part of T-B.  The Byrnes headmaster will probably find some sort of position, although Trinity has no need of more administrative staff. She is well connected, however, and a kind a charming person; she will certainly land well.  The other faculty who jumped ship last year must be thankful to have found jobs before all this happend. 

And what of the families who prepaid for the next year?  Especially the lower school families?  This is hard to say.  The prepaid amount is usually pretty substantial and will not be easy to simply pay back.  Remember, they've spent it all already so they can't just cut everyone a check.  They may have worked out an agreement with Trinity to finance a repayment, but Trinity had the clear upper hand in any negotiation and probably didn't agree to this unless it won them something else.  Odds are good that they will simply not pay at all and those families will be left to eat the cost.  They would possibly have a case of negligence against the board if they took the money while knowing they were insolvent and would be shutting down over the summer. 

Sadly, they're probably just going to lose their money. 

Of course, if they had read this blog they would have known better...