Mosdos Ohr HaTorsh

The girls' school of Mosdos Ohr HaTorah, at 1700 S. Taylor Road in Cleveland Heights, has been renamed Yeshiva Derech HaTorah, as has the boys' school at 1508 Warrensville Center Road in Cleveland Heights.

Mosdos Ohr HaTorah, the Orthodox Jewish day school in Cleveland Heights that went into receivership this past summer, has been renamed Yeshiva Derech HaTorah, the Cleveland-based charity that has acquired it.

Irv Berliner, an attorney for Yeshiva Derech HaTorah and a member of its board of directors, said the acquisition of the school’s assets was completed Dec. 16. The terms of the sale were approved Nov. 5 at a hearing in Cuyahoga County Common Pleas Court, and the sale closed and the period to appeal the decision ended Dec. 16, Berliner said.

The purchase price was $950,000. The Robert and Ita Klein Charitable Foundation, based in Cleveland, was the primary contributor, said Berliner, a partner in the Cleveland office of the Taft Stettinius & Hollister law firm.

“As a board member, I’m very excited about the opportunity to educate these kids,” Berliner said. “We are very thankful there was no interruption in the education of these 500-plus kids, and that’s what’s important. The kids’ education has been ongoing, and that is great … the kids never missed a beat in their education.”

The schools will remain in the same buildings – at 1508 Warrensville Center Road for the boys and 1700 S. Taylor Road for the girls, both in Cleveland Heights – and the school’s faculty and staff have “effectively been retained,” Berliner said.

“This is the education their parents have chosen for them,” he said. “They weren’t forced to go to a different institution, which is very important for those families.”

Facing a debt of about $14 million, Mosdos Ohr HaTorah applied for a judicial dissolution of its two corporations in Cuyahoga County Common Pleas Court in July. Unable to cover its budget via tuition and fundraising, the school covered its debt primarily through debt financing, mostly from people associated with the community and parents.

“Mosdos is pleased that the receiver (Billy Frazier) found a buyer,” said Harry Brown, a partner at Benesch, Friedlander, Coplan & Aronoff, the Cleveland-based law firm that represented Mosdos in the case.

“We hope the school will be successful in its mission to the stakeholders in the community – the students, parents, teachers and staff who were all in jeopardy because of (the school’s) financial problems. I think the assets and operations have been sold to very good people – those who are the directors of Yeshiva Derech HaTorah – and they have a commitment to excellent education and fiscal solvency, which is what the school needs.”

Frazier, principal and managing member of Raintree Capital Partners of Cleveland, was appointed by the court July 31 to serve as receiver to administer the dissolution case. He said Yeshiva Derech HaTorah – a tax-exempt, nonprofit organization – was the only “qualified” bidder that sought to acquire Mosdos’ assets.

“There were some other interested parties,” he said. “But (Common Pleas Judge Maureen Clancy) had a very abbreviated time frame, and within that time frame the only qualified bidder was Yeshiva Derech HaTorah.”

In August, lawyers for Mosdos requested that the court authorize the school to enter into a credit agreement with Yeshiva Derech HaTorah, which provided loans to Mosdos via an interim financing order. The court authorized Mosdos to borrow up to $700,000 under the order, allowing the school to remain in operation while the court case was pending.

Mark Weiss, administrator and chief financial officer of Montefiore in Beachwood, is chairman of the new board. The third board member is Rabbi Yitz Frank, Ohio director of Agudath Israel of America.

Moish Tohn, who had served as interim executive director of Mosdos Ohr HaTorah since July, is the new executive director of Yeshiva Derech HaTorah.

“We appreciate the understanding and cooperation of the parents, teachers, students and the community,” Tohn said in a press release. “Classes today look much like classes yesterday, and we are proud to provide the continuity to our students and parents.

“The new administration, board and our funders are committed and dedicated to the highest ideals of Torah education and expect to continue to improve the education our students receive while maintaining a sound fiscal base.”

Frazier said about 70 people filed claims seeking money they believe Mosdos owes them. He said he hopes to have the claims process completed by the end of January.

“If I object to their claim, they can appeal the objection in (common pleas) court,” he said.

Brown said Yeshiva Derech HaTorah would not be held liable for the $14 million debt incurred by Mosdos.

“When the entire receivership process is over, then the court will order the dissolution of Mosdos Ohr HaTorah and Congregation Mosdos Ohr HaTorah (the two corporations), and that order will be filed with the secretary of state’s office,” he said. “Those two entities will go out of business, they will cease to exist, and any unpaid debt will cease to exist.”

The boys’ school, at the former Warrensville Center Synagogue, houses students in preschool through eighth grade. The girls’ school, which opened in 1993, is for students in preschool through 12th grade.

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