News
Erie Rise Assets Assigned to an Independent Accountant
At the request of the Erie school district, Erie County Judge Marshall Piccinini appoints a superintendent to settle the finances of Erie Rise, which closed to students a year ago and has nearly $2 million in the bank.
How Erie Rise Charter School Let a Mother Down
On January 25, 2023, Erie resident Ruth Lanzo explains why she withdrew her children from Erie Rise charter school after being one of their biggest fans.
Ed Palattella, Erie Times-News
- Erie Rise Leadership Academy Charter School Closed to Students June 30, 2023
- The Erie School District first sued Erie Rise in December over the pace of its financial dissolution
- Increasingly upset about Erie Rise’s missed deadlines, Erie County Judge Marshall Piccinini orders trustee to manage Erie Rise, preserve public assets that will revert to Erie School District
A year after it closed to students, the publicly funded Erie Rise Leadership Academy Charter School lost control of its operations during its prolonged financial dissolution.
An Erie County judge has appointed an independent trustee to wind down Erie Rise’s business and preserve its assets, which will revert to the Erie school district. Erie Rise has about $1.9 million in the bank right now, according to evidence presented in court.
Judge Marshall Piccinini, clearly exasperated by the pace of Erie Rise’s financial dissolution and Erie Rise’s handling of the process, appointed the receiver in an order he issued at a hearing Friday morning.
“This is not just a matter of time,” Piccinini said on the bench. “It’s a question of trust.”
The order means that the receiver, William G. Krieger of Pittsburgh-based financial advisory firm Gleasonwill take over Erie Rise operations from its staff and board of directors.
Krieger, a certified public accountant and managing director and vice president of Gleason, will report to Piccinini and will be paid with funds from Erie Rise. The rate for a managing director and vice president at Gleason is $420 per hour, according to a rate schedule Piccinini attached to his written bankruptcy order filed after Friday’s hearing.
Receiver appointed at the request of the Erie School District
Piccinini issued the order at the request of the Erie School District, who filed a petition in Erie County Common Pleas Court in January for the appointment of a receiver to oversee the financial dissolution of Erie Rise. The district said the dissolution was moving very slowly under the control of Erie Rise staff and the charter school’s outside consultant.
Piccinini delayed a decision on the petition for several months while he convened a series of status conferences in his courtroom to monitor the dissolution of Erie Rise. He held the most recent status conference on May 29, where he renewed his dissatisfaction with Erie Rise missing its self-appointed dissolution deadline of May 31.
The judge’s dissatisfaction remained evident on Friday. Piccinini, after the May 29 status conference, said he would review the school district’s request for a receiver, but granted the request Friday morning at the end of an emergency hearing he convened via a truck. trunk.
The Erie School District requested the hearing due to concerns that Erie Rise planned to donate the box truck, valued at $20,000, to the private Community Country Day School without seeking approval from the Erie School District on the disposition of the asset. Erie Rise’s attorney, Zainab Shields of Philadelphia, said Erie Rise would not donate the box truck, which ended the dispute.
But Piccinini said he was upset because the box truck episode showed that Erie Rise was still in the process of evaluating its assets nearly a year after the charter school closed to students on June 30.
Piccinini said he was tired of Erie Rise officials, including his Maryland-based consultant Christian Anderson, “moving the goalposts on a regular basis” while continuing to spend public money to carry out a dissolution that Piccinini said should have been made months ago.
Piccinini said he was concerned that Erie Rise agreed to pay Anderson $10,000 a month through December to continue overseeing the dissolution. Erie Rise paid Anderson another $110,000 in 2023. The new contract, the box truck episode and other evidence showed that Erie Rise has “the intention of continuing the slow process of dissolution,” Piccinini said Friday.
At status conferences, Piccinini shared the Erie School District’s concerns that Erie Rise continued to employ three regular employees in addition to Anderson, even though the school had no students.
According to statements in court Friday, Erie Rise trustees terminated the hiring of regular employees that day, but only after Piccinini on May 29 instructed the school to do so. One of the employees, Aubrey Favors, director of human resources at Erie Rise, earned $90,000 a year.
The judge chooses the recipient from the list sent by the school district
Shields, the Erie Rise attorney, argued for months that the charter school was dissolving as quickly as possible. She cited Pennsylvania Department of Education regulations, which impose no timeline for the dissolution of a charter school. Shields appeared by video at Friday’s hearing and did not immediately respond to an email seeking comment on Piccinini’s appointment of a receiver.
The Erie School District’s lead attorney on the case, Michael Musone, acknowledged the lack of legal deadlines for dissolution. But he argued that Pennsylvania law still authorizes a judge to appoint a trustee for a closed charter school under certain conditions.
Piccinini said he could not find any other case in which a judge had appointed a trustee for a charter school in Pennsylvania. But he said he agreed with the school district that such an appointment was justified to help preserve Erie Rise’s assets — assets that will be transferred to the Erie School District — rather than those assets dissipating during the dissolution.
“Our primary concern has been the preservation of public property,” Erie School District attorney Tim Wachter said after Friday’s hearing, which he attended with Musone. “Today’s comments showed that the judge shared these concerns.
“We are confident that the appointed trustee will take appropriate steps to preserve the remaining assets.”
The school district included the receiver’s name, William Krieger, on a list of proposed receivers that Piccinini asked the district to submit. Wachter said Gleason, Krieger’s financial consulting firm, has members who regularly serve as court-appointed administrators.
Wachter said the district became aware of the Gleason firm through its members’ work in U.S. Bankruptcy Court. Piccinini said he interviewed Krieger while reviewing the district’s petition for the appointment of a receiver.
Wachter said Krieger must first examine Erie Rise’s finances to determine how long the dissolution will take under his watch. No matter how long the process takes now, Piccinini and the school district said, it is expected to cost less with a receiver than with Erie Rise.
Erie Rise Faces Two Investigations as Disbandment Continues
Erie Rise, with about 300 students in kindergarten through eighth grade, closed June 30 after the Erie School Board revoked its charter due to poor academic performance and other problems. The school operated in the former Emerson School building at West 10th and Cascade streets.
The majority of Erie Rise’s revenue came from the Erie School District. The district sent Erie Rise $3.4 million in 2023 to pay its students’ tuition.
The pace of Erie Rise’s financial dissolution led the Erie School District to sue the charter school starting in December, when he requested court intervention to force Erie Rise to provide him with financial documents and other records about his assets. Unhappy with the charter school’s handling of the dissolution, the school district requested in January the appointment of a receiver.
The receiver-led dissolution of Erie Rise will come as the charter school remains embroiled in two other unresolved issues.
One year ago, on June 7, 2023, the U.S. Department of Education searched the Erie Rise offices. The department’s Office of Inspector General was seeking records on a multimillion-dollar federal grant for after-school programs for students from low-income familiesaccording to testimony at status conferences before Piccinini.
The U.S. Department of Education has given no indication that the investigation has ended.
And at an Erie Rise status conference on April 29, Shields told Piccinini that the Pennsylvania Ethics Commission is investigating Erie Rise. Shields said the commission was reviewing documents linked to the school and interviewed Favors, its HR director, to obtain information.
No matter how these investigations end, Piccinini’s receivership order puts Erie Rise on a different path toward dissolution.
“We are pleased with the judge’s decision,” said Neal Brokman, assistant superintendent of operations for the Erie School District. He attended Friday’s hearing as the district’s charter school representative.
Piccinini’s order, Brokman said, allows the school district to “finally close the charter school and its assets.”
“And then we can move forward,” Brokman said.
Contact Ed Palattella at epalattella@timesnews.com or 814-870-1813. Follow him on X @ETNpalattella.