Westport, Conn.-based bridge lender Titan Capital ID provided $8.8 million in exit financing to take a struggling Brooklyn private school out of bankruptcy, Mortgage Observer has first learned.
Adelphi Academy, one of Brooklyn’s oldest preparatory schools, filed for Chapter 11 in June to reorganize its finances and continue operations during the bankruptcy process. Adelphi had planned the financial reorganization with Titan Capital prior to its bankruptcy filing, according to the school’s general counsel.
Adelphi’s ability to pay off its debts took a hit due to decreasing enrollment following news in 2008 of imminent foreclosure by the school’s previous lender, Metropolitan Commercial Bank, which held a $6.2 million note on the school’s property, court records show.
Titan Capital, which provides 1- to 2-year loans, originated the exit financing on Sept. 30 to pay off the defaulted debt and provide extra cash that will allow Adelphi to fund its payroll, according to Daniel Nadri, an analyst with the bridge lender.
The prep school, located at 8515 Ridge Boulevard in Bay Ridge, Brooklyn, is now in the process of resolving litigation tied to two ongoing cases.
In 2012, Adelphi was hit with a $28 million lawsuit by the parents of an 11-year-old student who alleged their son was roughed up by one of the school’s administrators and that the student and his two brothers later had their enrollment terminated. The school’s administrators filed their own $100,000 defamation case, prior to the plaintiff’s lawsuit, the school’s general counsel said.
Those cases are close to being resolved, he told MO.
Adelphi Academy opened in 1863. The school currently enrolls about 100 students.