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Wells Fargo sues Fulton Science Academy after $19M default


December 20, 2012
ALPHARETTA, Ga. — Wells Fargo has filed a lawsuit over a $19 million bond default by the Fulton Science Academy.

Last year, the Development Authority of Alpharetta made the loan to finance the construction of a campus to eventually house the FSA elementary school (Fulton Sunshine Academy), FSA Middle and FSA High. After Fulton County revoked the charter for the middle school, plans for construction stopped and the loan went into default in June.

According to the Dec. 17 lawsuit filed in U.S. District Court, first reported by the Atlanta Business Chronicle.

Wells Fargo says Fulton Science Academy has not made payments on its $18.9 million loan. Wells Fargo is trustee for the holders of the bonds.

"The note has been accelerated with payment in full demanded. Defendants are in default under the terms of the note," Wells Fargo's complaint said. "Defendants have failed to meet their repayment obligations for those funds under the terms of the Note. The Note has been accelerated with payment in full demanded."

Read the lawsuit here:

The Fulton County School System has cut ties with Fulton Science Academy. The Fulton Science Academy Middle School has reopened this year as a private school after it lost its bid for as a charter school.

The Fulton Science Academy High School could also lose its charter.

At a hearing on Tuesday, the Fulton Science Academy leaders told the Fulton Board of Education that the school was close to an agreement that would not involve them paying back the bond.

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Tags: Education News & School Sports, Government & News & Crime

  1. report print email
    Well that makes sense...
    December 20, 2012 | 08:26 PM

    ...this organization doesn't have the funds to pay their debt, so sue them! I'm in no way defending the slackards running the organization, but come on. The only entity that will get guaranteed money out of this will be the lawyers.

    Jason
    Milton
  2. report print email
    FCSB at Fault
    December 20, 2012 | 09:50 PM

    If the Fulton County School Board hadn't revoked FSA's charter, it would be meeting this financial obligation. But the #1 performing middle school in the county in all 4 subjects was too much competition for them.

    Roswell Parent
    Roswell
  3. report print email
    Excuses, Excuses, FSA ASSUME responsibility no more blame game.
    December 21, 2012 | 12:25 PM

    Fulton Science Academy administrators aka the Gulen Movement and their layers of local NGOs will predictable say "THis is unfair, it is Wells Fargo's fault" or "We plan on fighting this unjustice" "It's for the children how can the Fulton County BOE do this to the children"
    Lack of assuming responsibility and being transparent are two predictable traits of members of this "cult" and furthermore they could just pick up the phone and have members of TUSKON pay off this loan.



    Ergen Kaan
    Athens
  4. report print email
    Wells Fargo
    December 26, 2012 | 10:33 AM

    Well...where is the $19m intended to build the school? It is probably in Turkey by now while the predictable scam artists and moral destitutes live in luxury.

    Just Nasty & Mean
    Johns Creek
  5. report print email
    The truth of the matter is actually different
    January 03, 2013 | 06:36 PM

    It would be good if appen newsletter contacted school attorney before publishing this as is. It looks negative when you don't know full story. It is actually good news for Fulton Science Academy. See more details here:

    Mitchell T. Bagwell of Foltz Martin Hudson & Knapp, is the attorney for Fulton Science Academy. He said this step was expected.

    "This was an anticipated step in the settlement agreement process which all parties, including Wells Fargo and the Schools, have agreed to resolve the bond matter. A consent judgment ending the lawsuit, signed by Wells Fargo and the Schools, will be filed within the week, again as anticipated in the Settlement Agreement," he said.

    The school never drew down the full $18.9 million bond. Dexter said the school owes $9.9 million plus interest. She said after one monthly payment was made the school started having issues with its charter, which led it to default.

    "The default is a direct result of the Fulton County School Board's decision to terminate the middle school charter. The bond documents stipulate that if a school lost its charter, that would result in automatic default," Bagley said. "Therefore, the school was not defaulted due to missed payments. The settlement process began shortly after the middle school charter termination and will resolve the debt issue."

    Bagley said sale of the land would be the last step in the settlement process, which he expects to be completed by early spring. He said the settlement process is complicated and hard to explain without getting into too much detail.

    "However, the Schools are pleased that a settlement has been reached with respect to the bonds," he said.

    FSA Staff
    Alpharetta
  6. report print email
    The truth of the matter is actually different
    January 03, 2013 | 06:36 PM

    It would be good if appen newsletter contacted school attorney before publishing this as is. It looks negative when you don't know full story. It is actually good news for Fulton Science Academy. See more details here:

    Mitchell T. Bagwell of Foltz Martin Hudson & Knapp, is the attorney for Fulton Science Academy. He said this step was expected.

    "This was an anticipated step in the settlement agreement process which all parties, including Wells Fargo and the Schools, have agreed to resolve the bond matter. A consent judgment ending the lawsuit, signed by Wells Fargo and the Schools, will be filed within the week, again as anticipated in the Settlement Agreement," he said.

    The school never drew down the full $18.9 million bond. Dexter said the school owes $9.9 million plus interest. She said after one monthly payment was made the school started having issues with its charter, which led it to default.

    "The default is a direct result of the Fulton County School Board's decision to terminate the middle school charter. The bond documents stipulate that if a school lost its charter, that would result in automatic default," Bagley said. "Therefore, the school was not defaulted due to missed payments. The settlement process began shortly after the middle school charter termination and will resolve the debt issue."

    Bagley said sale of the land would be the last step in the settlement process, which he expects to be completed by early spring. He said the settlement process is complicated and hard to explain without getting into too much detail.

    "However, the Schools are pleased that a settlement has been reached with respect to the bonds," he said.

    FSA Staff
    Alpharetta
  7. report print email
    The truth of the matter is very clear
    February 01, 2013 | 01:43 PM

    1) No paid attorney will get you out of this one. Nor will it stop the power machine that Wells Fargo has. Pay up.

    2) You wouldn't be in default had you paid your loan or made an attempt to pay. Instead you are stiffing the American Finance system and even American workers like Construction firm JL Johnson in Texas. Yes, Yes you finally settled but it was cents on the dollar.

    3) Excuses excuses will get you no where in America. You "couldn't pay the loan because your school was closed" it just isn't going to work anymore, you KNEW the school was recommended to be closed before you signed on the loan documents. That is deceit and breach of contract which Wells Fargo will hold you accountable for.

    4) More than likely you will stiff them out of the full amount and make some paltry settlement. The land will be part of the deal and Wells Fargo will own it. Thereby you will be forced to move somewhere else.

    The High School will cease to exist as a "charter" even the state won't step in and help. THe politicians like Albers, et al are distancing themselves from you.
    Americans have a saying "pay up or shut up"

    You set a poor example to American children about assuming responsibility and the excuses are never ending but predictable in Texas (Harmony Science) to Ohio (Horizon Science Academy) to the hearings at other state BOE. Same thing different state or country.

    This time out, the superintendants throughout the USA are waiting for you. Loudoun County tossed you out, and now the good people of Lancaster and CT are waiting for your lies.

    Ergen Kaan
    Athens
  8. report print email
    Let me correct this
    February 06, 2013 | 03:15 PM

    Ergen, I do not know who you are and never heard of your name in the community before. I am not sure if you really know what's going on. You should do more research before you blame anyone. Frankly, what I am thinking is that you are either lying or you are trying to defame this school.

    You have inaccurate information.

    If Fulton County did not approve it, Fulton Science Academy would never get that bond. For you to say FSA knew the closure but still signed the bond simply not true.

    How could you even think Fulton Science Academy, a county charter can get 19 million bond without approval of the County. FSA has the documentation showing county's approval. This was before renewal.

    Here is the truth: Fulton Science Academy operated with $7,500 per student, received incredible results including blue ribbon, had $750,000 surplus, had 700 people on the waiting list, got triple B rating and got 19 million bond to construct a beautiful campus using the same $7,500. Let me rewrite that using the same $7,500. This is an incredible achievement story.

    Think about it more and you will find out how what FSA has accomplished could be a threat to a system operating with much more money than FSA and further using extra millions of taxpayer money to build schools.

    What FSA has achieved was incredible. Really, think about it before blaming anyone unless your intention is only to put blames but not to learn the truth.

    By the way, the bond issue resolved and the land was sold yesterday. Soon, there will be a beautiful Fulton Science Academy building raising there.

    You can lie so much but truth will always prevail.

    FSA Staff
    Alpharetta
  9. report print email
    Let me correct this
    February 06, 2013 | 03:15 PM

    Ergen, I do not know who you are and never heard of your name in the community before. I am not sure if you really know what's going on. You should do more research before you blame anyone. Frankly, what I am thinking is that you are either lying or you are trying to defame this school.

    You have inaccurate information.

    If Fulton County did not approve it, Fulton Science Academy would never get that bond. For you to say FSA knew the closure but still signed the bond simply not true.

    How could you even think Fulton Science Academy, a county charter can get 19 million bond without approval of the County. FSA has the documentation showing county's approval. This was before renewal.

    Here is the truth: Fulton Science Academy operated with $7,500 per student, received incredible results including blue ribbon, had $750,000 surplus, had 700 people on the waiting list, got triple B rating and got 19 million bond to construct a beautiful campus using the same $7,500. Let me rewrite that using the same $7,500. This is an incredible achievement story.

    Think about it more and you will find out how what FSA has accomplished could be a threat to a system operating with much more money than FSA and further using extra millions of taxpayer money to build schools.

    What FSA has achieved was incredible. Really, think about it before blaming anyone unless your intention is only to put blames but not to learn the truth.

    By the way, the bond issue resolved and the land was sold yesterday. Soon, there will be a beautiful Fulton Science Academy building raising there.

    You can lie so much but truth will always prevail.

    FSA Staff
    Alpharetta
  10. report print email
    Let me correct this
    February 06, 2013 | 03:15 PM

    Ergen, I do not know who you are and never heard of your name in the community before. I am not sure if you really know what's going on. You should do more research before you blame anyone. Frankly, what I am thinking is that you are either lying or you are trying to defame this school.

    You have inaccurate information.

    If Fulton County did not approve it, Fulton Science Academy would never get that bond. For you to say FSA knew the closure but still signed the bond simply not true.

    How could you even think Fulton Science Academy, a county charter can get 19 million bond without approval of the County. FSA has the documentation showing county's approval. This was before renewal.

    Here is the truth: Fulton Science Academy operated with $7,500 per student, received incredible results including blue ribbon, had $750,000 surplus, had 700 people on the waiting list, got triple B rating and got 19 million bond to construct a beautiful campus using the same $7,500. Let me rewrite that using the same $7,500. This is an incredible achievement story.

    Think about it more and you will find out how what FSA has accomplished could be a threat to a system operating with much more money than FSA and further using extra millions of taxpayer money to build schools.

    What FSA has achieved was incredible. Really, think about it before blaming anyone unless your intention is only to put blames but not to learn the truth.

    By the way, the bond issue resolved and the land was sold yesterday. Soon, there will be a beautiful Fulton Science Academy building raising there.

    You can lie so much but truth will always prevail.

    FSA Staff
    Alpharetta
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