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Role Models seeks to drop bankruptcy

In May, Role Models, a military-style academy for high school dropouts, filed for Chapter 11 bankruptcy protection.

In May, Role Models, a military-style academy for high school dropouts, filed for Chapter 11 bankruptcy protection.

September 30, 2002|by SCOTT BUTKI

scottb@herald-mail.com

A U.S. Bankruptcy Court judge in Greenbelt, Md., on Thursday indicated he would probably approve a request by Role Models America Inc. to dismiss its Chapter 11 bankruptcy case, a Role Models attorney said Friday.

During the Thursday hearing, Judge Paul Mannes asked representatives of PenMar and the Labor Department if they objected to Role Models ending its bankrupt status and they said they did not, Role Models attorney Ed Kimmel and PenMar Board President Brett Wilson said Thursday.

Mannes indicated he found the motion "seductive" and would probably approve it, Kimmel said. Unless objections are raised, the decision will become effective in about 10 days, Wilson and Kimmel said.

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In May, Role Models, a military-style academy for high school dropouts, filed for Chapter 11 bankruptcy protection, which frees it from the threat of creditors' lawsuits while it reorganizes its finances.

Mannes in June approved a motion to allow PenMar to evict Role Models from land on the former Fort Ritchie U.S. Army base. In court papers, PenMar contended Role Models had on more than one occasion violated a sublease agreement by failing to pay rent and utility expenses.

When Role Models was evicted on July 13, its founder and president, Robert Alexander, said he would find a way to ensure the school would return to the base.

Kimmel, of Takoma Park, Md., said he advised Alexander to withdraw the Chapter 11 filing because, without a site for the school, "there really wasn't anything to reorganize."

Role Models has about $100 to $200 left from a two-year $10 million U.S. Department of Labor grant that expired May 30, Kimmel said.

Alexander could not be reached for comment.

Alexander plans to operate another school at another, undetermined site but its size and form will depend on how much money he can raise, Kimmel said.

Fewer than 20 students graduated from the school during its two years at Fort Ritchie.

The bankruptcy filing blocked legal action PenMar has taken against Role Models, including a suit claiming Role Models owed a $329,874 quarterly rent payment and $34,874 in utility payments. It also blocked a $35,216 lien the Washington County treasurer filed against Role Models alleging the school was delinquent on personal property taxes.

Legal actions can now continue but "you can't liquidate a nonprofit," Kimmel said.

Kimmel said Role Models will continue to pursue in court its allegations against PenMar, including the claim that the school was unable to use about 120,000 square feet of the 253,000 square feet it leased for about $1.3 million a year because PenMar refused to make improvements and repairs needed for occupancy.

The lawsuit said PenMar should pay Role Models $1.8 million for overpayment of rent and utilities for buildings and services not provided, including $450,493 for renovations PenMar failed to make.

PenMar denies any wrongdoing.

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