Court settlement will oust JEC school from building

Sign up for Weekday J and get the latest on what's happening in the Jewish Bay Area.

The S.F-based Jewish Edu-cational Center's day school must abandon its building by Sept. 10, according to a settlement reached between the landlord and the charity's bankruptcy trustee.

U.S. Bankruptcy Court Judge Dennis Montali must still approve the settlement to make it binding. The order is set to go before him Monday.

The latest development makes the Schneerson Hebrew Day School's future shakier than ever.

About 125 children reportedly have signed up for classes, which are scheduled to start Sept. 15. At the same time, all but two of JEC's employees were laid off Aug. 1, though many have stayed on as volunteers. And the school apparently has nowhere else to go for now.

Frank Malifrando, who is now the JEC's unpaid program director, said he and other former employees are hoping for a last-minute reprieve or reassurance of financial help from the trustee.

"We love the kids. The programs are wonderful," he said Wednesday. "Where will the kids go otherwise?"

One potential life boat is an outside buyer who may still purchase the Richmond District building for the JEC before Monday and then lease it to the charity.

But Stuart M. Kaplan, the JEC's court-appointed trustee, called the possibility of an outside buyer wishful thinking.

"It's possible. I happen to believe in miracles myself sometimes," he said.

Lycee Francais, a French-sponsored school and owner of the building at 34th Avenue and Balboa Street, has been trying to oust the JEC since the lease ran out earlier this summer.

Last year, the JEC signed a 10-month lease for the building and paid $100,000 for an option to buy it for $2.05 million by June 15, 1997.

But the JEC never came up with the money. And just as the lease-option was set to expire, the local, state and federal government swooped in on the JEC. Its top officials were charged with a variety of alleged misdeeds, including fraud, tax evasion, false advertising and diversion of funds for personal use.

Creditors of the JEC, which once brought in millions of dollars selling donated used cars, have filed claims for bills totaling $600,000 to $1 million.

Since June, JEC board chair Carol Ruth Silver has been fighting a legal battle and asserting that the JEC still had the right to buy the building. She did not return phone calls for comment.

Kaplan asserted that the settlement was the best deal for the JEC.

"I undertook that for various legal and financial reasons I think are sound — compelling in fact," he said.

Kaplan would not comment further on the settlement, which was filed with the court Friday of last week.

According to the settlement documents, however, Kaplan conceded that the lease-option purchase ran out in June, that JEC's chances of winning in court were slim and that JEC doesn't have the money to buy the building anyway.

Rebecca Fruchtman, an attorney for Lycee Francais, said the trustee will turn over the building on Aug. 31. But Lycee Francais will let the JEC stay for another 10 days.

In return, Lycee Francais agreed to become a general creditor instead of a priority creditor. This means that the JEC won't immediately have to pay the 10 weeks in back rent totaling more than $46,000. Each side agreed to drop all claims against the other.

Lycee board member Jean-Yves Lendormy will be pleased when the settlement is official. "We will be done wasting time and money," he said.

In a related matter, about 500 cars and other inventory still sitting at the JEC's Los Angeles- and New Jersey-area lots were sold this month for about $200,000.

Meanwhile, the JEC's school and other programs are being shifted to the umbrella of the Schneerson Russian Jewish Center.

The Schneerson center, an inactive nonprofit previously created by JEC, hopes to begin the used car auctions as fund-raisers again.