Families hope for Kilmore school’s revival as Colmont’s massive debt revealed

Liquidators of the collapsed Colmont School have found its owners owe more than $6.55 million to creditors and families, many of whom are unlikely to ever see the money, even as some hold out hope that a select-entry private school will be revived in Kilmore.

In July last year, more than 350 students were given two days’ notice that the school would close. The Victorian Registration and Qualifications Authority told administrators on August 30 they were cancelling Colmont’s registration as a school and boarding premise.

Administrators have recommended Colmont School be put into liquidation. an investor. But it hangs on approval Parents and teachers L-R Amit Verma, Melissa Ryan, Leigh Eeles, Julie Daniella and Alok Thakur.Credit:Justin McManus

The school has been put into liquidation and its directors are being investigated for potential breaches of their duties and trading while insolvent.

The most recent report from administrators Cor Cordis, released to creditors on Friday and seen by The Age, found more than $3.43 million is owed to former staff, including annual leave and leave loading, long service leave, pay in lieu, redundancy, superannuation and wages (salary sacrifice amounts).

Liquidator Rachel Burdett wrote that staff and priority creditors of the former Kilmore International School may get a small amount back, but only if administrators can recover more money through liquidation. At July 26 last year, the school employed 97 staff and had 359 enrolments, including 29 international students and 35 boarding students.

Burdett encouraged former employees who were owed entitlements to apply to the federal government’s Fair Entitlements Guarantee Scheme, which is a last resort to recoup wages in the case of insolvency.

Former teacher Sandi McNamara said most teachers had applied to the scheme weeks ago.

“We have no illusion that we are going to get any money out of the school,” she said.

McNamara, who hopes a private school will reopen at the Colmont site, said she was doing emergency teaching while waiting.

“That’s why I’m still very much in limbo, not wanting to commit to anything until we know what’s going on,” she said.

More than $3.11 million is owed to unsecured creditors, including $68,800 in new student deposits, $1,612,948 in domestic student fees, $399,704 from international students, $966,834 from trade creditors and $127,521 to the Tax Office.

A group of parents and former teachers continue to hold out hope that a select-entry school will reopen in Kilmore, on the site of the failed Colmont school, but they will have to wait at least until the beginning of the 2024 school year.

A previous, eleventh-hour application to the schools regulator to reopen the school at the start of this year was declined.

Ayub Khan, a businessman who has led the attempt to open an International Baccalaureate school on the site, said he would submit a new application to the Victorian Registration and Qualifications Authority to launch the school next year.

“The need hasn’t disappeared; the parents have gone and parked their kid here and there and the teachers have taken up positions in other schools, but they’re not too keen,” Khan said.

He said the school he hopes to open would have no connection with Colmont’s former owners.

Cor Cordis is continuing to investigate whether directors breached their duties, whether they traded whilst insolvent or if there were possible breaches of the Education Services of Overseas Students Act or Trading Reform Regulations.

Burdett said in the report the company may have been trading while insolvent at least from December 31, 2021, until administrators were appointed on July 26, 2022. The estimated value of insolvent trading with unsecured creditors was between $550,000 and $2,571,452.

“From a parent point of view, I paid the fees and my child should be in that school. I didn’t do anything wrong, somebody else did something wrong.”

Parent Alok Thakur said families weren’t expecting to recoup fees, but did want to see justice.

“From a parent point of view, I paid the fees and my child should be in that school. I didn’t do anything wrong, somebody else did something wrong,” he said.

He said students were still reeling from the abrupt closure.

“Our goal has always been to get the school back on its feet in whatever shape or form, as soon as we can,” he said.

Colmont School went into voluntary administration, leaving hundreds of families scrambling to find a new school.Credit:Jason South

He said there was a lack of selective entry schools, or schools that offered the IB program in Melbourne’s north.

“I have to send my son to a boarding school in Ballarat,” he said.

The school blamed COVID-19, border closures, lockdowns, a lack of assets owned by the school which prevented it from getting finance and declining economic conditions for the closure.

But liquidators also attributed the closure to a reduction in enrolments since at least 2018, including a decline in international students and the use of prepaid fees to meet previous expenses.

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