Parents chased for unpaid fees by closure-hit school

St Margaret's School
St Margaret's School
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DEBT collectors are still chasing more than 100 parents for tens of thousands of pounds in unpaid fees more than a year after St Margaret’s School closed, the News can reveal.

Around one in three parents of pupils who attended the bankrupt Edinburgh school still owe fees totalling more than £137,000 – while dozens of other parents who paid up to £30,000 in advance fees are yet to receive a single penny back. The huge debt includes a sum of £20,000 owed by a foreign embassy for one pupil.

St Margaret’s went into administration in June 2010. Its closure affected 350 pupils and led to the loss of 85 jobs.

Liquidators KPMG vowed last week at the annual creditors’ meeting to continue pursuing the fee-dodging parents through the courts, as they announced that all four St Margaret’s buildings have now been sold for £4.3 million.

But unsecured creditors, such as parents and teachers, will have to wait for another year before they receive any payments.

The outstanding fees originally stood at £400,000 before KPMG successfully took a number of parents to court.

Several teachers are taking the school through employment tribunals as they await unpaid wages.

One parent, who asked not to be named, paid £10,000 in advance for her child’s fees and told the News those who had refused to pay up were “the lowest of the low”.

The woman, who lives in south Edinburgh, said: “The board of governors decided to pull the plug on the school without a word of warning and they were still encouraging parents to pay fees in advance until the last minute. They must have known that they were about to call in the liquidators. These parents that didn’t pay up when they received the school’s services are the lowest of the low. And the school had previously been very lax in following up debts that had existed for a very long time. If we get anything back it will be a bonus.”

Blair Nimmo, who heads the KPMG Edinburgh office, said parents failing to pay had prolonged the liquidation process.

He said: “When we came along, there was quite a lot of debt [of school fees], some of which was quite old. A number of people have been pursued through the courts and we will continue to pursue the debtors until it is no longer cost efficient to do so.

“Unfortunately, a number of parents did pay in advance and they are now creditors. One parent in particular had paid around £30,000 in advance. There are also some arrears of wages for employees.

“Our target is to get some payments to unsecured creditors around 12 months from now. Sadly it will be a low fraction of what they are owed.”

The current figure unsecured creditors are expected to get back is 15p to every pound owed.

Val Devlin, chairwoman of the school’s Parents and Friends Association, said she was still saddened and angered about the situation. She said: “I’m sad that the buildings have sold for considerably higher than they were valued at because it was the low evaluation that meant we had to go into liquidation in the first place, as the assets were not worth the value of debt.

“I’m very angry with the parents who refused to pay up because they have cost us our school.”

Mr Nimmo said the buildings had been exposed to the property market over a period of time to make sure potential investors could fully research them, meaning they had attracted the upper end of their estimate.

vraimes@edinburghnews.com