THE DAHLONEGA NUGGET
News
Hidden Lake officials see Chapter 11 as chance to regroup
By Sharon Hall
Published: Wednesday, June 3, 2009 10:28 AM EDT
Hidden Lake Academy founder Dr. Leonard Buccelatto, like many corporate leaders in today's economy, is hoping Chapter 11 will be a tool in rebuilding the private therapeutic boarding school he founded in Lumpkin County 1994. The academy voluntarily filed a petition for Chapter 11 with the bankruptcy court May 14. The move, Buccelatto says, will allow the school to regroup and make arrangement to pay down its debt rather than face foreclosure on part of its property.
“The school has applied for bank refinancing. HLA only asks that people understand and bear with us during this rebuilding time,” Buccelatto said. “With the current economic times we believe this type of financial scenario will, unfortunately, be repeated throughout the country.”
It's not just the poor economy HLA is suffering from, however. Much of its woe stems from a 2006 petition for a class action lawsuit filed by the parents of several HLA students. Buccelatto called it a “contract dispute-the parents wanting some of their tuition monies returned after their child had attended HLA. The petition made no claims of harm or damage to a child.”
In fact, Buccelatto says, some of the students named in the petition graduated from the academy and have since gone on to college.
In August 2007 Federal Judge William C. O'Keley denied the potential class action suit, despite “a well-orchestrated and vigorous campaign by the plaintiffs and their attorneys, very few parents joined the petition,” Buccelattor says.
HLA agreed to settle out of court with the parents for a reported $400,000, a fraction of the amount initially demanded, Buccelatto says.
Even after the settlement agreement, however, the negative campaign launched when the petition was filed continued, Buccelatto says. He called the tactics used on the Internet, in the local press, by some local community members and aimed at the school's referral sources “vicious and unrelenting ... It became very evident that the goal of the people involved was to discredit, and to ultimately close the school ... creating as large a financial burden to the school as possible by attacking [our] referral sources through fear and intimidation. It would be a gross understatement to say that these events did not have an impact on the school. The financial reality is one the school is still reeling from.”
HLA suffered a severe drop in enrollment, and was faced with $1.5 million in legal fees, along with its usual loan payments and other costs of operation.
At one point HLA was the second largest private employer in Lumpkin County, with 138 faculty and staff, 90 of whom lived in the county. Additionally, 12 local people were employed by the food service contractor used by the school.
In 2004, the academy paid over $600,000 to local vendors for various products and services, and an additional $730,000 for food service purchases.
In addition, parents, alumni and prospective students and their families spent an average of 2,800 nights in local lodging and purchased over 8,000 meals in local restaurants.
“The financial circumstances have been devastating. But since the resolution of this matter, HLA is rebounding, with students once again enrolling. We are slowly getting back on track; our referral sources are all back helping us to repair the damage that was done to the school,” Buccelatto says. “Hidden Lake Academy is a wonderful program which will survive this ordeal.”
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