DOWNTOWN LA — The former director at a private Santa Monica high school that was forced to close after filing for bankruptcy last year has agreed to pay parents and other creditors $200,000 as part of a settlement agreement, according to those familiar with the case and court records.
Susan Packer Davis, who ran Concord International High School since the late 1990s before resigning in November of last year, was accused of misusing more than $1 million in school funds to pay for personal expenses. She also put her husband, Eric Hille, and her son, Alexander Davis, on the school’s payroll although it was uncertain what services they provided or the value of those services.
All three were named in a civil lawsuit, which was filed in April in U.S. Bankruptcy Court by trustees of the now-defunct school.
The settlement is expected to be approved today by Judge Barry Russell during a hearing in Downtown Los Angeles. In exchange for the payment, the lawsuit will be dismissed and no report will be made to any credit agency with respect to the settlement, according to court records.
“This will return some of the money, but it doesn’t return to the kids the educational experience they should have had, particularly for the seniors, who had their last year of high school stolen out from under them. That is something I will never forget,” said Richard Corlin, a former trustee of Concord whose son was a senior when the school closed.
Packer Davis, whose mother, Sonya Packer, founded Concord in 1973, could not be reached for comment. Her husband and son also could not be reached.
However, in court filings they argued that Concord “received reasonably equivalent value” in exchange for the payments to Packer Davis and her family because Packer Davis was more than just the head administrator and her base compensation was lower than salaries of heads of comparable schools and she did not receive any retirement benefits.
They also argued that hotel charges made by Packer Davis, a former chair of the Santa Monica Rent Control Board, were covered under a housing allowance and that the school received “valuable” services from Packer Davis and her family them that were below fair market value.
Michael Kogan, an attorney representing Concord during the bankruptcy proceedings, said the settlement was fair and based on several factors including the cost of further litigation, the number of claims filed and the risk involved with collecting the money.
The school filed for Chapter 11 bankruptcy protection in November 2010, soon after Packer Davis left. Parents and staff then began looking into the school’s affairs, which had been administered by Packer Davis with few support staff.
Parents and teachers told the Daily Press that they could never have imagined a school with a strong academic reputation and a legacy like Concord’s would go under. After all, this was a school that was established and was known for sending graduates to Ivy League universities. Packer Davis placed an advertisement in a major newspaper ever year listing the universities graduates would attend.
In public tax records, required to be filed by nonprofit corporations, Packer Davis and her husband were listed as the only members of the school’s board of directors. According to the records, she paid herself a salary of $308,000 in 2009, and the school’s revenue for that year totaled about $1.5 million.
The tax records also show that over the course of three years, Packer Davis declared expenditures of more than $700,000 for “conferences, conventions and meetings.” Teachers and parents have said they knew of no such events and can find no documents supporting the charges.
The Daily Press obtained copies of canceled Concord High checks signed by Packer Davis for parts of 2009 and 2010 amounting to more than $22,000 to the Palazzo Westwood Village, a luxury apartment complex, and $9,000 to the W Hotel.
According to the civil suit, Packer Davis charged more than $380,000 to the school’s credit card; it is unclear how much of that was for school-related expenses. The suit said she also paid her husband $45,000 and her son $53,000 in 2009-10.
The landlord of the building the school had been renting on Wilshire Boulevard sued for nonpayment of several months’ worth of back rent and was listed in bankruptcy documents with a claim for $115,000.
Corlin and teachers who spoke with the Daily Press said they learned that only a handful of students were paying full tuition while the majority were on scholarship, setting the school up for financial failure.
While the settlement brings some closure, those parents who paid full tuition, which was roughly $30,000 a year, only to see the school close before the school year was completed said they were not holding out hope that they would be paid back in full given the large number of creditors and attorney fees.
Some said they would not be satisfied until criminal charges are filed.
“I am disappointed that law enforcement did not bring criminal charges against Susan and Eric for stealing from the families who paid tuition and expected to get education in exchange for their money,” said Abby Arnold, whose son attended Concord International. “It goes to show once again that there are no criminal consequences for those who ‘rob us with a fountain pen.’”
A handful of parents and teachers from the old Concord have founded their own school, Concord Prep, which is run out of the Boys & Girls Club of Santa Monica. While the number of students enrolled is low — around 25 — the learning environment is just as rigorous and engaging, said Lillian Wallace, who lost approximately $60,000 when the old Concord folded. She has two children enrolled in the new school.
“I think a school like this is needed,” she said. “It’s a school where kids who are gifted or who may have a learning disability, or who are just plain gifted and bored in regular school are challenged and taught creatively. They like their teachers, and I think that encourages them to do well.”
Wallace said the first graduating class of Concord Prep helped the school create a new website to attract more students and some donors have stepped up.
“I hope this school continues,” Wallace said.