Trenton, N.J.’s Somerset Hills School has filed a Chapter 11 bankruptcy protection in order to adjust its $3 million in debt.
According to an August 6 NJ.com article, the private, tax-funded school for disabled children filed on July 25 at the U.S. Bankruptcy Court in Trenton with the help of a Chapter 11 bankruptcy attorney. The school’s debt includes $1 million owed to its pension fund for current and former employees.
What is Chapter 11 bankruptcy? A Chapter 11 bankruptcy helps the debtor reorganize and restructure their debts and assets to create a manageable debt repayment plan.
About 10 months ago, the Star-Ledger reported on Somerset Hills’ questionable spending, along with other problems at the school and a related treatment center for children with disabilities, NJ.com reported.
The school is also facing potential lawsuits from more than two dozen of its former employees, NJ.com reported.
Ryan Kimmins, Somerset Hills’ owner, told NJ.com the school is seeking help filing bankruptcy to “ensure the long-term viability” of the school.
“During our reorganization, we will continue operating our school, business as normal,” Kimmins said. “Our high-quality educational program will continue uninterrupted for our students.”
While the overall bankruptcy rate has been on a downward trend over the last year — in 2013, approximately 1,000,000 bankruptcies were filed — there are still a large number of individuals and organizations that seek Chapter 11 bankruptcy help with their debts.