Investors who have sunk about $6 million into developing a new private school in Aiken County are hoping to buy back the property from the court-appointed receiver.
The receiver, Columbia lawyer Sherri Lydon, told a judge at a June 3 hearing that there was no way Compass Academy could be operational for the 2013-14 school year, so she intends to liquidate the school assets, according to Mark Powell, a spokesman for the South Carolina Attorney General’s Office.
Jerry Rowe, who represents investors intent on seeing the project through, said their hope now is to buy the property at a discount and raise funding to complete it and have it open by the fall of 2014.
“We are going to buy from ourselves and finish it in time for the 2014-15 school year,” said Rowe, who was one of the original three dozen or so investors to loan money to Aiken businessman Jonathan “Jay” Brooks for construction of the school on Toolebeck Road, east of Aiken.
Brooks’ business dealings as a financial adviser and broker came under scrutiny of the attorney general last year.
He has been accused by state regulators of fraud and misuse of investors’ money in financing the private school, which is about 80 percent complete. His wife, Tracy Brooks, the school administrator, also has been accused of misusing school funding, including the purchase of a $21,000 diamond ring with investor money, according to a civil complaint filed in South Carolina Circuit Court. Jonathan Brooks’ licenses as a financial adviser and broker were suspended in March and the couple’s assets, including their home and the school property, was frozen by a court order.
In April, Judge Clarence Newman appointed Lydon as a receiver for the Brookses’ assets, including the school. She was ordered to provide a accounting of those assets and a report on the feasibility of continuing the school project within 30 days.
That report is now sealed by the court, and Rowe said he and the other investors want to know what it says.
“As for the inventory of assets, Ms. Lydon reports directly to the Court and her report is sealed,” Powell said in an e-mail. “Only Judge Newman has access to it, so I can’t tell you anything about the status of it.”
Lydon did not return phone messages seeking more information about her report.
Stan Jackson, the attorney representing the school, said the investors should see the report before they sink more money into the project.
“I certainly think the lender’s group that have made the loans to Compass Academy should be provided the study, so as to make an informed decision,” said Jackson, who has asked to be excused from the case.
He said he didn’t think the receiver should have to spend any school money to pay for his services, which are no longer needed.
Rowe said he and the other investors are frustrated by the process and feel they are being shut out by the attorney general and the court.
“I think the state is scared to death of Compass Academy. Somebody has a grudge against that school,” he said. “They will not relinquish any information.”
Nevertheless, their plan is to bid on the property if it goes on the auction block and do what has to be done to finish the project.
“We are going to raise more money and accomplish what we started to do,” said Rowe, who estimated it would cost an additional $2 million to complete construction. In addition to that, there will be operation and startup costs, he said.
Rowe, who retired to Aiken after a career in the construction business, said he was happy so far with the building his money has helped finance.
“The dollars are there,” he said. “The truth of the matter is right there on that field is your money.”