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Receiver recommends $51,000 for Christian School lawyer

An attorney who served as the last headmaster of Hendersonville Christian School would receive a fee of $51,000 if a judge approves a receiver's recommended distribution of the school's remaining cash today.


Henderson County bought the school buildings and property for $910,000 in January and has turned it into the Athletics and Activity Center. After paying off a mortgage for $765,000, paying real estate commission and other closing costs of $91,000 and a Duke Energy bill of $1,519, the sale left the school with $55,362 to pay unsecured creditors and the lawyer.
Court-appointed receiver William Gardo has recommended a distribution that gives the creditors about 20 cents on the dollar based on their claim.
The school was broke when it out of business in June 2012, its attorney said in court documents.
James L. "Skip" Goldsmith, its last headmaster, also served as the lawyer who defended the foreclosure lawsuit by TD Bank, handled the shutting down of the school and negotiated the sale of the property, which included a classroom building and gym on 9½ acres on South Grove Street.
Because the sale involved the assets of a non-profit corporation, the state attorney general reviewed the proposed distribution of sale proceeds. Assistant Attorney General Kimberly A. D'Arruda filed a nine-page report in which she questioned whether Goldsmith and the school board had an arm's length relationship when the board agreed to pay him 30 percent of the sale proceeds of the school property. The attorney general approved the sale to Henderson County but blocked the payment to the attorney until a receiver could identify creditors and invite them to make claims.
Superior Court Judge Alan Z. Thornburg in February appointed Gardo to "take possession of the net proceeds derived from the sale of the school property" and hold them in trust until the court approved a disbursement. The order directed Gardo to contact unsecured creditors, determine the validity of their claims and file a report on the amount to be paid to the creditors and to the school's attorney.
Although the attorney general's report raised questions about the payment of $20,000 to Goldsmith, the proposed disbursement under Gardo's report is 2½ times that.
In an affidavit he filed in March, Goldsmith said he had actually earned $273,000 for his work "representing the school in all legal matters during the period of winding down and dissolution." He filed a timesheet showing that he had worked 419 hours and expected to work 30 more. (That would have come out to $608 an hour, had he received the total he requested.)
His legal and administrative duties, he said, included the safeguarding of school records, handling correspondence, maintaining banking and financial records, filing tax returns, negotiating and settling claims against the school and filing articles of dissolution with the state. The school board retained him for a promise of 30 percent of the sale proceeds. "On July 30, 2012, Hendersonville Christian School had less then one hundred dollars in its bank account and no ability to pay a legal fee other than by a contingency fee arrangement," Goldsmith said.
Unsecured creditors submitted claims totaling $296,605, with Goldsmith's claim by far the largest. Gardo recommended that claimants receive an amount equal to 18.7 percent of their claim. Besides the lawyer's fee, claims ranged from $4,632 by a former schoolteacher to $201 for a Hendersonville city water bill. The employee would receive $865 and the city would get $37.52 if a judge approves Gardo's recommendation. Schoolteachers Faith Cooper, Lynn Lechron, Denise Walden and Grace Currie made claims.
Kate Brighton, a theater teacher at the school during its last year, said she was unable to get help last summer from Goldsmith or Gardo in retrieving equipment, costumes and props she had used in her classes.
"They left me a text message that I could go get my stuff at 2 o'clock," she said. When she got to the school, she said, "all of my costumes and props had been given out. The spotlight I had there was gone."
When she was hired to teach theater, she said, she provided her own lighting and sound equipment, props and costumes for performances. She said she tried to contact Goldsmith after the school closed and Gardo when he was appointed receiver and got no return calls.
Gardo's secretary said that the lawyer certified claims from people who had an invoice. Goldsmith's claim was supported by documentation of hours worked and services he performed, she said.
The receiver's report is subject to the approval of a judge in Henderson County Superior Court on July 15.