‘Sucked dry’: How a private school fell into financial ruin

There were warnings two years ago that the Kilmore International School was at risk of insolvency.The school’s founder now lives in a mansion on Brighton’s golden mile.A whistleblower from inside the former Kilmore International School wrote to Australia’s corporate regulator two years ago warning the Victorian school was at risk of financial collapse and that high fees were being paid to companies controlled by the school’s founder.

In 2012, Victoria’s school regulator, the Victorian Registration and Qualifications Authority, reviewed the school and questioned the commercial rationale of licensing and other fees being paid from a nominally not-for-profit school to Wittmer.this week, Wittmer dismissively characterised the review as “a couple of hard-headed women beating time with a big stick”.

Wittmer confirmed he was paid $10 million from the school over 20 years to let it use the Kilmore International School name, uniforms and other intellectual property. The monies were paid under an open-ended licensing agreement the school board entered into in 1998 when Wittmer was board chairman.Wittmer defended the annual payments of $520,000 as fair recompense for capital he provided to the school in its early years.

Administrator Paul Langdon, from Vince & Associates, told a creditors’ meeting on Friday that no restructuring plan had been put, or any additional funding offered, that would allow the school to stay open.and teachers from the school owed fees and unpaid entitlements, voted to dump the Vince & Associates team and appoint new administrators – Rachel Burdett and Bruno Secatore from the firm Cor Cordis – to explore the Chinese company’s proposal to reopen the school.

Half of the board’s six directors quit at the start of this year. A former director said the board became divided and dysfunctional, meetings were increasingly haphazard and that it was difficult to obtain financial information.Under a corporate structure devised by Wittmer, the land, buildings and intellectual property of the school were housed within companies he controlled, and a separate company was established, with no assets, to govern the operations of the school.

Mott is a director of the Crystal Group, a property development company involved in the creation of St Hilaire, a new town planned on the southern boundary of Wallan that will eventually be home to 180,000 people.

Melbchief That's exactly what I expected a predator to look like

Melbchief Why did ASIC not investigate?

Melbchief Why else would they need to charge these fees? Starting checking up on the rest of them.

Melbchief JaneCaro - in case you haven’t seen this (no longer) private school scandal story from Victoria.

Melbchief

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