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'Perfect' Private School Falls on Hard Times

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Most schools would have to sell a mountain of brownies before raking in the cash generated by a recent Phoenix Academy fund-raiser, where people bid on imported oriental rugs, a set of silver candlesticks, and two crystal chandeliers.

But the $62,000 raised at the event was barely enough to keep the brand-new private school in Nashville, Tenn., from financial straits. Now the parents of students at the school for gifted children, which opened this fall, are hocking a $700,000 house that belonged to the former headmistress.

In an unplanned and unwelcome twist on the idea of parent involvement in schools, Phoenix Academy parents have been working feverishly to keep the 188-student school afloat since mid-September, when accusations arose of misuse of school funds by the headmistress.

The parents took control of the school as a partial settlement in a suit they had filed against former Headmistress Barbara Bachman, who allegedly used school money to buy and furnish her $700,000 home. The accord also gave the parents the house and its contents.

"We're kind of at a make-or-break situation right now," parent Edgar Rothschild, a bankruptcy lawyer, said last week.

The parents have had a trial-by-fire course in school management. Volunteers work the school's phones, supervise the lunchroom, and run the library. To avoid bankruptcy, they've cut the budget to the bone, eliminating many of the programs that drew them to the school in the first place.

Only last week did the school's new five-member board feel it was on somewhat firm financial ground. Once it sells Ms. Bachman's home, the board believes it will have enough to stay open through the end of the year, said parent Kathryn King-Metters, now the school's president.

The board recently began searching for a new headmaster or headmistress.

'It Was Perfect'

What has become a crisis began as a dream come true for the Phoenix Academy parents, who felt that the Nashville area's public schools were not challenging their high-performing children.

Ms. Bachman, a former teacher at another Nashville private school, promised an attractive concept: A K-8 school that seeks students with IQs of 120 or higher, entices a talented faculty, and offers a challenging curriculum including advanced courses in mathematics, science, and computers.

The new non-profit school found a home in Nashville's First Christian Church, from which Phoenix rents its space.The school's annual tuition is about $6,000.

"It had everything that's written in the books for what's needed for gifted children," said parent Terri Dozier. "It was perfect."

But after the school opened in August, parents began to suspect the Phoenix promise was an illusion. A group of teachers and two parents filed a lawsuit against Ms. Bachman in mid-September right after school staff members saw their first paychecks bounce.

According to parent John Taylor, a probe by parents and staff into the school's finances showed that Ms. Bachman had used about $300,000 in school funds to buy the house and paid for scores of expensive items, such as jewelry, with Phoenix Academy checks.

Ms. Bachman has since told local newspapers that she bought the home for the school, and that she wanted Phoenix to be the pilot for a chain of new schools.

The District Attorney General's office in Davidson County, Tenn., confirmed last week that it was investigating Ms. Bachman. Officials said they would not file any resulting criminal charges before the civil suit is completed. Mr. Rothschild said the plaintiff's may seek further damages.

Ms. Bachman could not be reached for comment, and a lawyer representing her did not return phone calls.

Pledges From Parents

After reaching the partial settlement, the parents realized the extent of the financial disarray. In addition to the paychecks, checks to other creditors, including the Internal Revenue Service, bounced, Mr. Taylor said.

The parents, most of whom had already paid their children's tuition, pledged another $100,000. They hope to keep the 19 full- and part-time teachers, some of whom have accepted a pay cut.

"The one good thing [Ms. Bachman] did was to hire good teachers," Mr. Taylor said.

Among the parents are ample lawyers, business managers, and other professionals who have lent their expertise to keeping the school running. Few, however, have school experience, and they're seeking advice from experts as they design a program almost from the ground up.

"I do crisis management, and this was a classic crisis-management situation," said Ms. King-Metters, who assumed many of the daily responsibilities.

Many of the Phoenix Academy parents acknowledge that they considered throwing in the towel when the allegations first arose. But Ms. King-Metters said they still believe in the school's concept.

The parents of about 150 of Phoenix's 188 initial students have chosen to stay.

"I truly believe that as a country we're doing a lot to help the kids at the tail end of the bell curve, and we don't offer adequate schooling for the students who are exceptional," Ms. King-Metters said.

In public school, Ms. Dozier's 8-year-old son was ridiculed as the smart kid. "They don't label him here like they do at public school," she said. "He'd come home and say, 'They don't call me when I raise my hand.'"

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