U.S. judge to decide future of JECs school building

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A federal bankruptcy judge told the Jewish Educational Center on Monday that the charity may lose the right to purchase its school building in San Francisco.

But the matter will remain unresolved until a final hearing Monday, Aug. 25 — three weeks before school is set to begin.

The embattled charity, whose former leaders face state charges including fraud, tax evasion and diversion of funds, is desperately fighting to retain the building at 34th Street and Balboa Avenue.

Without the building, the JEC-run Schneerson Hebrew Day School will have to quickly relocate in order to start on Sept. 15.

Regardless of what happens in court, JEC board chair Carol Ruth Silver vows the school will open. "As in any school plan, there are contingencies," she said. "In this case, there are more contingencies than there usually are."

Right now, it's unclear how the 140-student school could afford any rent or mortgage. But court-appointed bankruptcy trustee Stuart M. Kaplan said the school could open despite limited resources.

Those possibilities, he said, include using volunteers, relocating to a "more modest" site and resuming used-car auctions with "certain ground rules" from the state Attorney General's Office.

"The problem is I need a bridge of money," said Kaplan, who i s still assessing JEC's fiscal viability.

Belinda Johns, a deputy attorney general, said the charity possibly could resume the auctions of donated cars — with significantly different radio ads and management — if Kaplan decides the charity is a candidate for reorganization instead of liquidation.

Lycee Francais, the French-sponsored school that owns the building, is seeking a way out of the automatic protection given JEC once its creditors filed for involuntary bankruptcy last month.

Lycee Francais leased the building to the JEC last summer. The JEC paid $100,000 for an option to buy the building for $2.05 million by this past June 16.

Attorneys for Lycee Francais maintain the JEC didn't properly try to purchase the school and thus lost the lease-option in June. JEC attorneys argue Lycee Francais extended the lease-option and thus JEC still has the legal right to buy the property with outside investors.

At Monday's preliminary hearing, U.S. Judge Dennis Montali said he didn't see proof the charity met lease-option terms by the deadline.

Montali also said there didn't appear to be a "meeting of the minds" between JEC and Lycee Francais over an extension.