A local charter school that recently filed for bankruptcy and announced its permanent closure has submitted a motion to dismiss the case in federal court, saying it lacks any assets that could be used to reimburse creditors.

LEAF Charter School, at 6 Baine Way in Alstead, filed for Chapter 11 bankruptcy in U.S. District Court in Concord on April 17, according to documents submitted by the school’s attorney, William Amann.

He filed the motion to dismiss Friday, three days before the school shuttered. 

According to a list of creditors Amann filed in court, the Savings Bank of Walpole holds the largest unsecured claim of a $180,000 loan, followed by the Department of Education, with grant fund reimbursements worth $55,524. The list, of 20 creditors with the largest claims, totals $329,243.

The school had planned to use about $110,000 in existing funds in the bank to pay employees and finish the school year, with about $99,500 in an operating account and around $11,400 in a payroll account, according to court documents. In an April 19 emergency motion asking the court to compel the Savings Bank of Walpole to unfreeze the funds, Amann stated that the school was expecting a round of funding between $40,000 and $50,000 from the state that would be used to pay creditors. 

However, Amann withdrew that motion after the bank’s attorney, Eleanor Dahar, filed an objection stating that LEAF Charter School’s last loan payment was Feb. 12 and the bank could freeze the funds based on the loan security agreement.

“As a result of the Debtor’s default on its loan, the Walpole Bank froze the funds in both of the Debtor’s accounts,” Dahar wrote, specifying that the freeze occurred before the school filed for bankruptcy.

After withdrawing the motion to unfreeze funds last Tuesday, Amann filed a motion to dismiss the bankruptcy case Friday.

In the filing, Amann wrote that the school would not be receiving money it had expected from the state. And while not elaborating on the reason for this, Amann's motion describes the impact on LEAF's next steps.

“In short, with the School’s only source of funding (the State) effectively unavailable, the prospects of reorganization or being able to offer Walpole Savings Bank any adequate protection disappeared,” he wrote, adding that he and the school had discussed the impact on the students and staff with the bank's attorney and the N.H. Department of Education.

He added that the case should be dismissed rather than converted into another chapter of bankruptcy because there are no assets the school could use to pay its creditors.

According to the U.S. Courts website, an organization filing a Chapter 11 bankruptcy case “usually proposes a plan of reorganization to keep its business alive and pay creditors over time,” while a Chapter 7 case allows for liquidating assets and distributing the proceeds to creditors.

“Upon information and belief, a chapter 7 would not yield any distribution to any creditors or employees,” Amann added.

According to state law, chartered public schools are operated independent of school boards and managed by a board of trustees, with payments coming from the state's education trust fund.

After receiving approval from the state board of education in January 2016, LEAF Charter School opened in the fall of 2017. The school was founded to support hands-on learners who may not thrive in a traditional classroom setting, per previous Sentinel reporting. Documents filed in the bankruptcy case indicated it was serving about 60 students in grades 9 through 12, with 14 staff members.

In an email to LEAF community members last Wednesday during the school's April break, Board of Trustees Chair Becky Snow said the school would close Monday.

“Despite our best efforts, we have been unable to secure the resources needed to keep the school operational,” Snow said. “After exploring all available options, including bankruptcy Chapter 11 Subchapter V, it has become evident that our school has no feasible way forward."

A note Snow sent the week before spoke about the bankruptcy filing and the upcoming closure but said the plan was for the school to continue until June.

Amann declined to comment Tuesday. Snow did not immediately respond to a request for comment.