May 29, 2014 12:12 AM by Matthew Schwartz
Tucson - The hallways of Luz-Guerrero Early College High School, the classrooms, the outside areas are virtually empty now with students on summer vacation. The charter school's bank account has also been empty.
Luz Social Services, which operates the high school and middle school, along with non-profit social services programs, has filed for Chapter 11 bankruptcy protection. Bankruptcy court records show debts of about $2.5 million dollars, owed to more than 80 creditors, including the IRS.
Attorney Eric Sparks is representing the school in the bankruptcy proceeding. Sparks explained to the News 4 Tucson Investigators how the cash flow problems began.
"Trying to develop the school faster, trying to provide more services faster than maybe they should have. They've tried to grow too fast."
Luz is behind on state and federal taxes, and property taxes. Sparks says the financial re-organization will help the school in the long run. A major positive factor is that Luz Social Services owns the land, about 30 acres, that the complex is on. So Sparks will be able to get a more manageable mortgage.
Sparks says all the administrators were paid have only half of their regular paychecks last week, but that he's going to court next week to seek a release of funds so they can get caught up.
Ricardo Robles, the principal of Luz-Guerrero Early College High School, said the financial problems have been stressful for the administration and staff. "I think the Chapter 11 helped us through seeing that long-term, there will be some answers. They'll still be getting a quality education."
The school principal and its bankruptcy attorney say summer school will go on as usual at Luz, and that when the new school year begins in August, the 250 students who attend the high school and middle school won't notice anything different.
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