Private School on UWS May Shut Down after Bankruptcy Judge Rejects Loan Deal

The end may be near for a progressive private school on the UWS that has operated for nearly 50 years after a federal bankruptcy judge rejected the latest proposal for a bridge loan to keep the K-12 school afloat through the summer.

Founded during the Civil Rights Movement in the mid-1960s, the Manhattan Country School (MCS) operates two locations—its main campus in a historic 98-year-old building on West 85th Street and a farm in Roxbury, NY, where students engage in hands-on sustainable agricultural practices and learn about cooking, farming, nature, and textiles.

The school’s financial woes burst into public view in October 2024, when the Flushing Bank filed a foreclosure lawsuit against the school, claiming it had defaulted on a $2.5-million loan. The school had entered into a forbearance agreement with the bank earlier, but according to the lawsuit, the school had failed to meet the terms of that agreement, prompting the bank to file the foreclosure suit.

The school filed for Chapter 11 bankruptcy on May 17, hoping to freeze the foreclosure action. Under terms of Chapter 11, a company continues to operate while seeking to come to terms with its creditors.

But Federal Bankruptcy Judge David S. Jones rejected a high-interest loan the school had proposed, which the school said would have financed its operations through the summer. According to Bloomberg news, the school proposed taking an $8-million loan with a 12 percent interest rate from the Casa Laxmi Foundation, a youth education charitable trust founded by the Kulkarni family.

“The school appears to have been run in a quite financially irresponsible manner—maybe born of desperation,” Jones said at the hearing on May 20, according to Bloomberg. Jones said he was disappointed, especially for the children, but felt compelled to follow through with the ruling.

The bankruptcy judge’s ruling caps off several years of financial woes by MCS, which the school say were exacerbated by the pandemic, when many families were unable to meet tuition payments.

The school traces its roots to its founding in 1966, inspired by the progressive civil rights movement and the teachings of Martin Luther King Jr.

In its mission statement, MCS said it is committed to “academic excellence, intellectual freedom, social awareness, self-confidence, and first-hand knowledge of the natural world.”

Although its top tuition is $59,000 a year, it is also known for a sliding tuition model, which determines tuition by the assets and needs of individual families.

MCS bought its current building from the Greenwich Village-based New School for $28 million in January 2015, financed by a $31-million loan from Ladder Capital that was paid off in 2020, according to Pincus Media. Meanwhile, between 2016 and 2019, the school borrowed approximately $25 million in bonds and debt that ultimately were acquired by Flushing Bank. As of 2022 the total principal debt was approximately $24 million, Flushing Bank said.

In its bankruptcy filing, the school lists the value of its building on the UWS as $38 million, and the farm in Roxbury, NY, is listed with a valuation of $1.5 million.

While rich in real estate, the school has cash-flow problems.

The bankruptcy petition filing showed the school had only $82,351 left in its bank account. Peter Kamran, an MCS attorney, stated he believes the school may be unable to operate without the emergency loan that the judge rejected. The school has reportedly used next year’s tuition payments to fund the current year.

Manhattan Country School and its bankruptcy attorney’s office did not respond to West Side Spirit by press time.