In opinion detailing his decision to appoint receiver, Erie County Judge Marshall Piccinini says Erie Rise's slow dissolution was putting public money at risk. "Prudent" action was warranted, he says.
Erie Times-News
- On June 7, Erie County Judge Marshall Piccinini made first-of-its-kind ruling and appointed independent receiver to oversee financial dissolution of Erie Rise Leadership Academy Charter School
- The receiver has moved swiftly to catalog defunct school's assets, including about $1.9 million in public funds, the remainder of which will go mostly to the Erie School District
- In newly filed nine-page opinion. Piccinini details rationale behind removing control of dissolution process from Erie Rise's board and consultant
The Erie County judge who appointed an independent receiver to take control of the finances of the defunct Erie Rise Leadership Academy Charter School said one aspect of his unprecedented decision gave him pause.
The judge, Marshall Piccinini, said he should have appointed the receiver sooner to help preserve Erie Rise's assets, now at about $1.9 million in public money.
In a newly filed opinion that explains his June 7 decision that placed Erie Rise in receivership, Piccinini said he could have granted the Erie School District's request for a receiver by appointing someone as early as February. But he said he wanted to give Erie Rise — closed to students since June 30, 2023 — a chance to dissolve its finances on its own by its May 30 deadline.
Giving Erie Rise additional time was a mistake, Piccinini said in the opinion. Even with the leeway, he said, Erie Rise was too slow in winding up its affairs and transferring its assets to the Erie School District as state law requires.
"We are convinced that a seasoned receiver will be able to resolve these outstanding matters far more expediently," Piccinini said in a nine-page opinion filed in Erie County Common Pleas Court on June 26.
"Our only regret, in hindsight, is having given Erie Rise the opportunity to resolve these matters on its own terms, rather than having appointed a receiver in February, concerned as we were at the time that the appointment of a receiver may have delayed the conclusion of the wind up beyond the self-imposed May 30th deadline. This has undoubtedly resulted in the dissipation of assets through unnecessary and ongoing expenditure of funds that otherwise would have gone to the Erie School District."
By June 7, Piccinini said, the appointment of a receiver had to happen.
"Although the appointment of a receiver is strong medicine," he said in his opinion, "strong medicine is what is needed to bring an end to this prolonged and costly wind up."
Receiver has already made major changes at Erie Rise
The receiver, William G. Krieger, a managing director of Gleason, a Pittsburgh-based financial consulting firm, has moved swiftly since since he took over the operations of Erie Rise from its board a month ago.
Krieger ended the jobs of Erie Rise's three remaining employees, took control of its bank accounts, reviewed its financial and legal obligations and organized its files, he said in a June 28 report to the court, which the Erie Times-News obtained from the school district in a request under the Right-to-Know Law. Once Krieger resolves Erie Rise's outstanding financial obligations, the Erie School District will get nearly all of the remaining funds.
Krieger and his firm are getting paid with Erie Rise funds at as much as $420 an hour, according to court records.
"Although Mr. Krieger's services will come at a cost," Piccinini said in his opinion, "we are convinced that this cost will be worth the confidence that the dissolution will occur in a more timely and effective manner."
Krieger also ended the contract of the consultant Erie Rise hired to carry out the dissolution. The consultant, Christian Anderson, of Maryland, received $110,000 from Erie Rise in 2023. The school's board had agreed to pay him a total of another $76,000, in monthly installments, to oversee the dissolution in 2024.
Piccinini in his opinion said he had lost confidence in Anderson's efforts. Anderson told Piccinini at a number of status conferences that several issues, including a federal probe, complicated the dissolution. A lawyer for Erie Rise, Zainab Shields, of Philadelphia, argued that Pennsylvania law sets no deadline for dissolution of a shuttered charter school.
Piccinini noted the lack of a statutory deadline. And he noted that he could find no other case in which a judge had appointed a receiver for a Pennsylvania charter school.
In the case of Erie Rise, he said in his opinion, "substantial evidence" shows that the "appointment of a receiver is not only prudent, but necessary."
Judge removes Erie Rise from its 'current course'
The Erie School District has input on the dissolution because it was Erie Rise's chartering entity and primary funding source. The district sent Erie Rise $3.4 million in 2023 to pay the tuition of the approximately 300 students in kindergarten through eighth grade who attended the school, which opened in 2011 and had been located in the former Emerson School at West 10th and Cascade streets.
The Erie School Board cited poor academic performance and mismanagement when it voted in January 2023 to revoke Erie Rise's charter, setting up its closure as a school six months later. Since then, Piccinini said in his opinion, Erie Rise "has continued to incur ongoing, considerable and often gratuitous costs" as Erie Rise's own board showed no signs of pushing for a speedy dissolution.
"The Court," Piccinini said, "would be remiss if it allowed Erie Rise to continue on its current course any longer, all at the expense of the City of Erie School District and its students."
Contact Ed Palattella at epalattella@timesnews.com or 814-870-1813. Follow him on X @ETNpalattella.
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