Croft School founder issues an apology, as bankruptcy filing reveals $12.2 million in debt

In the year before the Croft School’s financial collapse, founder Scott Given used school funds to reimburse himself and his family close to $800,000, according to the private school’s bankruptcy filing Friday, even as he was raising millions of dollars from parents.

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Oxford Street Education LLC, the entity that owns and operates the for-profit school in Providence and Boston, filed for Chapter 7 liquidation in US bankruptcy court revealing how it owed creditors $12.2 million. Many of them are parents — some of whom bought bonds from Given to fund school improvements and expansion, and others who pre-paid tuition deposits.Nearly all of the creditors are unsecured, meaning they are unlikely to fully recover their money.

The 87-page filing also confirmed that the US attorney’s office, the US Securities and Exchange Commission, and Secretary of State William F. Galvin’s securities division have launched investigations into what went wrong at the beloved school that serves nearly 600 students with a location in Providence and two in Boston.

In March, the board accused Given of fraud, alleging that he hid $13 million in debt and kept two sets of financial records. The school was on the verge of closing, but parents raised more than $2 million to keep all three campuses open through the end of the academic year on June 12. The board tried to find buyers for the entire school but was only able to strike a deal to sell the South End location to a group of Croft parents. The Providence and Jamaica Plain locations will shutter next week.

A board spokesperson declined to comment on Friday.

After the bankruptcy filing, Given’s lawyers shared a three-page letter he had written to the Croft community, in which he apologized and admitted that he lied to families, teachers, and staff about the school’s finances. Given wrote that he got in over his head as he was trying to expand the school and hid problems from the board and investors.

“I am writing because I owe this community an apology, and because I owe people an honest attempt at answering the question many have asked: why?” wrote Given.

In the letter, he outlined how he borrowed money from his father and his wife’s parents to fund school operations, and when that wasn’t enough he developed a bond program to raise money from parents and other investors. He claims that he did not use the money for “personal luxury or enrichment.”

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Still, the bankruptcy filings show that in the weeks before Given’s tangle of lies unraveled, he withdrew school funds to reimburse his father-in-law, Stephan Hauke, just over $100,000 and his father, Robert Given, $40,000. All told, in the year before the bankruptcy filing, Given paid himself and his family $773,906 in loan repayments.

The bankruptcy filing also highlighted the financial priorities of the board. The school spent about $400,000 on restructuring costs and another $75,000 to pay bankruptcy lawyers; meanwhile, the school owes teachers and staff nearly $57,000 in pay and left a trail of other unpaid bills including $57,000 to BMP Music Program for afterschool strings lessons.

To recover their money, teachers and staff at the Jamaica Plain campus filed a lawsuit Thursday in Suffolk Superior Court against the school, Given, and board member Michael Goldstein. The suit, being handled by well-known workers’ rights firm Lichten & Liss-Riordan, alleges that the school is refusing to pay about 40 teachers and staff their salary for the full academic year — amounting to each losing thousands of dollars.

“We’ve earned our pay, and now we want to hold them accountable for their wrongdoings,” said Jenn Elson, a school counselor and one of the plaintiffs.

Parents have been upset not only at Given but also the four-member board for its lack of financial oversight. For Kyle Raynor, a parent who has two kids at the Jamaica Plain school, the transactions documented in bankruptcy court make him wonder how the board could not see the revenues were not covering the operating losses.

“The story from the start has been a failure of governance,” said Raynor. “This just sort of paints a more clearer picture of that.”

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