On or about August 1, 2008, Excel Academies, Inc. (“EA”) entered into a Lease Agreement, whereby EA leased a building known as the St. Bernard School, 5811 Riverdale Road, Riverdale, Maryland (“the Building”). Pursuant to the terms of the Lease, Defendant EA agreed to pay certain sums to Plaintiff Archdiocese in exchange for the use and occupancy of the Building. The parties agreed to amend the Lease several times, with the Third Amendment being agreed to on or about October 21, 2011. Pursuant to the Third Amendment to Lease Agreement, dated October 21, 2011, EXCEL Academies, Inc. agreed to pay an Annual Base Rental equal to $400,145.40 per annum, or $33,345.45 per month.
In late 2012, the Archdiocese of Washington retained us to pursue a claim agasint EXCEL Academies, Inc., for the breach of a lease agreement. On June 5, 2012, the Archdiocese of Washington sent a Notice of Default letter to EA advising that, at that time, at least $166,727.25 in rental payments were outstanding, due and payable, and demanded that the outstanding rent and all applicable fees be paid immediately. No payment was ever made. Eventually, we filed a complaint in the Circuit Court for Prince George’s County. …show more content…
Defendant EA has refused to pay the amount due and owing under the Lease. EA made an appearance in the action to petition for an extension of time to file an answer. EA’s counsel later withdraws their appearance and EA never filed an answer in the underlying action. On May 31, 2013, We moved for an order of default judgment in the underlying action. On October 15, 2013, following an ex-parte hearing on proof of damages, this Court awarded judgment in Plaintiff’s favor in the amount of one hundred sixty-six thousand seven hundred twenty-seven dollars and twenty-five cents ($166,727.25). Notwithstanding the valid judgment we retained on the Archdiocese’s behalf, EA has never satisfied, or even undertaken any effort to satisfy the judgment obtained against it. Moreover, the defendant in this action has continually ignored our efforts to enforce our judgment—including subpoenas for post-judgment depositions. On October 3, 2014, EA forfeited its corporate charter for failing to file a tax return. Although EA has forfeited its corporate charter, we have reason to believe that EA is still operating its charter school either in the absence of any sort of state-recognized corporate charter, or that the school has created a new entity within which to protect (or hide) its assets. See http://excelacademypcs.org/. We cannot know for sure which of these alternatives is the case, but we anticipate that we will be able to discern an answer to this question in discovery rather quickly. Upon the forfeiture of EA’s corporate charter, the directors of the corporation—Johnson, Bowie, and Marshal—assumed the role of director trustees for the purpose of winding up and liquidating the assets of the corporation pursuant to Md. Code (1975, 1985 repl. vol., 2017 suppl.) § 3-515 of the Corporations and Associations (“CA”) Article. We believe upon the forfeiture of EA, the directors of the corporation violated the Corporations Article of the Maryland Code in one of two alternative ways. First, the directors may have failed to wind up the affairs of the corporation and are continuing business in violation of CA § 3-514. Alternatively, the directors may have distributed the assets of the corporation into a new entity without first satisfying the corporation’s debt to the Archdiocese. The latter would not only be a violation of CA § 3-515, but is also likely a fraudulent conveyance under Maryland’s fraudulent conveyance laws. Under either alternative, upon EA’s forfeiture, EA and its directors had an obligation to satisfy the corporation’s debt to the Archdiocese. We have prepared a seven count complaint against EA, Johnson, Bowie, and Marshal, stating causes of action for: Detinue, Breach of Trust, Fraudulent Conveyance, Civil Conspiracy, Constructive Trust, Petition for Receivership & Assumption of jurisdiction, and Negligence. We believe that the Archdiocese’s claim to relief is rather straightforward and unassailable. Rather, the question in this matter is what assets are available, and from whom. Notably, in this subsequent action, we are pursuing not only the original $166,727.25 due under the lease, but also damages and interest incurred since as a result of the directors’ failure to undertake their obligations in winding up the affairs of the
In late 2012, the Archdiocese of Washington retained us to pursue a claim agasint EXCEL Academies, Inc., for the breach of a lease agreement. On June 5, 2012, the Archdiocese of Washington sent a Notice of Default letter to EA advising that, at that time, at least $166,727.25 in rental payments were outstanding, due and payable, and demanded that the outstanding rent and all applicable fees be paid immediately. No payment was ever made. Eventually, we filed a complaint in the Circuit Court for Prince George’s County. …show more content…
Defendant EA has refused to pay the amount due and owing under the Lease. EA made an appearance in the action to petition for an extension of time to file an answer. EA’s counsel later withdraws their appearance and EA never filed an answer in the underlying action. On May 31, 2013, We moved for an order of default judgment in the underlying action. On October 15, 2013, following an ex-parte hearing on proof of damages, this Court awarded judgment in Plaintiff’s favor in the amount of one hundred sixty-six thousand seven hundred twenty-seven dollars and twenty-five cents ($166,727.25). Notwithstanding the valid judgment we retained on the Archdiocese’s behalf, EA has never satisfied, or even undertaken any effort to satisfy the judgment obtained against it. Moreover, the defendant in this action has continually ignored our efforts to enforce our judgment—including subpoenas for post-judgment depositions. On October 3, 2014, EA forfeited its corporate charter for failing to file a tax return. Although EA has forfeited its corporate charter, we have reason to believe that EA is still operating its charter school either in the absence of any sort of state-recognized corporate charter, or that the school has created a new entity within which to protect (or hide) its assets. See http://excelacademypcs.org/. We cannot know for sure which of these alternatives is the case, but we anticipate that we will be able to discern an answer to this question in discovery rather quickly. Upon the forfeiture of EA’s corporate charter, the directors of the corporation—Johnson, Bowie, and Marshal—assumed the role of director trustees for the purpose of winding up and liquidating the assets of the corporation pursuant to Md. Code (1975, 1985 repl. vol., 2017 suppl.) § 3-515 of the Corporations and Associations (“CA”) Article. We believe upon the forfeiture of EA, the directors of the corporation violated the Corporations Article of the Maryland Code in one of two alternative ways. First, the directors may have failed to wind up the affairs of the corporation and are continuing business in violation of CA § 3-514. Alternatively, the directors may have distributed the assets of the corporation into a new entity without first satisfying the corporation’s debt to the Archdiocese. The latter would not only be a violation of CA § 3-515, but is also likely a fraudulent conveyance under Maryland’s fraudulent conveyance laws. Under either alternative, upon EA’s forfeiture, EA and its directors had an obligation to satisfy the corporation’s debt to the Archdiocese. We have prepared a seven count complaint against EA, Johnson, Bowie, and Marshal, stating causes of action for: Detinue, Breach of Trust, Fraudulent Conveyance, Civil Conspiracy, Constructive Trust, Petition for Receivership & Assumption of jurisdiction, and Negligence. We believe that the Archdiocese’s claim to relief is rather straightforward and unassailable. Rather, the question in this matter is what assets are available, and from whom. Notably, in this subsequent action, we are pursuing not only the original $166,727.25 due under the lease, but also damages and interest incurred since as a result of the directors’ failure to undertake their obligations in winding up the affairs of the