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Mistaken Appraisal Leads to School's Financial Trouble

By Net Assets posted 5 days ago

  

(from the Washington Post) A small music-education-focused school in Oakland, California, has run into trouble after taking out loans based on two appraisals of donated artwork. Four paintings together were valued at $2.8 million, and the school took out $400,000 in loans against the art, which helped pay for a new communications director and full-time admissions director. Enrollment in the academy, which is currently 24 students, is expected to nearly double next school year. But when the school looked into selling the paintings, they were found to be duplicates and worth very little. The school has laid off its new communications director and the head of the school, whose responsibilities are now shared among three faculty members, and issued pay cuts to the majority of the staff.

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