Baltimore's troubled Talmudical Academy has apparently escaped foreclosure by the Resolution Trust Corp. (RTC) by obtaining a $1.1 million mortgage from the Bank of Baltimore.
The 76-year-old school's new leadership also has begun efforts to pay $4 million owed to as many as 50 individuals who have lent money over the years. It has also begun a greatly expanded fund-raising campaign to bolster its financial future.
Plans are for the private school for 640 Orthodox Jewish boys to pay off the old mortgage by the close of business today, said Bruce Eisen, vice president of the Associated Jewish Community Federation of Baltimore. The new 25-year, 8.5 percent mortgage loan will be secured by the 10 acres of land and the school's buildings, located since 1966 on Old Court Road at the Beltway, Mr. Eisen and school officials said.
RTC is the federal agency that assumed debts from failed savings and loans, one of which, Yorkridge Calvert, held a first mortgage on the Talmudical Academy.
The Associated, which brokered the deal, added no cash to the arrangement, but agreed to be a limited guarantor for the mortgage. Richard Lansburgh, chairman of the Associated's board, said his group's role is based on two presumptions:
* That the school's property is worth far more than the mortgage amount.
* That the Talmudical Academy can be operated in the black.
Mr. Lansburgh and Associated President Darrell Friedman stressed that their faith in the reorganized layleadership and its "whole new spirit" was central to the agreement to be involved.
They also said the precedent-setting cooperation between the Orthodox Jewish school and the Associated, which raises funds in the larger Jewish community, would continue in an expanded effort to shore up private Jewish education generally in Baltimore.
"Jewish education," they said in a prepared statement, "is the best way to ensure Jewish survival and continuity."
Dr. Michael Elman, the new president of the school's board of directors, said money is still being raised to pay the school's teachers, who were not paid for a period in late April through June. All of the school's teachers have now been paid through June 15, the end of the academic year, school officials said. Some 12-month instructors are still owed pay totaling $135,000.
Dr. Elman said school leaders are meeting with three separate groups of creditors, mainly financial "angels" in the Jewish community who have lent money over the years to bail the school out of earlier crises. Though some of these people are willing to forgive portions of their debts, the school is determined to eventually "pay them every single cent," he said. Several of the benefactors have lent amounts in six figures, though most loans were under $100,000, school officials said.
The goal and the premise for the Associated's participation in saving the school is that the school learn to live on its own, without seeking emergency loans or going from crisis to crisis, Dr. Elman said.
He added that the school will begin issuing financial statements to parents and will widen its fund-raising efforts to include all alumni and others who may never have been asked for contributions.