Frazer School - Chapter 11 Case Summary

Business Description

The Frazer School, Inc. (the "Debtor" or the "School") is a K-12 grade school focused on academic excellence, founded in 2024 as a Florida corporation and currently in the process of converting to a Florida not-for-profit corporation. The School is located at 4700 NW 89th Blvd, Gainesville, Florida 32606.

• Although a private school, the School welcomes all students, who can enroll at current tuition of approximately $4,000 over and above the amount of State of Florida vouchers.
• The declaration in support of the First Day Motions is submitted by Olanrewaju Fayiga, the Principal and a member of the Educator Board of the School.

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Corporate History

The Debtor is a Florida corporation in the process of converting to a Florida not-for-profit corporation. The Debtor's federal tax identification number ends in 1813, and the Debtor does not have publicly traded equity.

Formation and Founding Ownership

• When Will Frazer co-founded the School with James Schrader ("Mr. Schrader"), Mr. Schrader and his wife, Rachel Schrader (collectively, the "Schraders"), initially held 100% of the School's shares and formed it as a Florida for-profit corporation.
• The Schraders also control Newberry Christian Community School, now known as Gainesville Christian Community School ("NCCS"), a separate Florida not-for-profit corporation.
• At and after formation, parents and other community members have supported the School financially through loans and grants provided to the School.

Governance Transition

• Up until late Fall 2025, Mr. Schrader, Co-Founder of the School, was operating and managing the School.
• A new three-person volunteer Educator Board subsequently took over governance of the School, comprised of Will Frazer, Co-Founder and a teacher at the School; Maxim Dolinsky, a Professor of Finance at the University of Florida; and Olanrewaju Fayiga. Each member now holds 33.33% of the School's controlling shares.
• According to the Debtor, this new corporate governance structure will strengthen oversight, enhance transparency, and improve operational fidelity for long-term sustainability, allowing the School to fulfill its mission.

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Operations Overview

The School is focused on competitive academics, with a pedagogy that emphasizes collaboration and teamwork, as students work together to achieve common goals and learn to work in harmony with those who might be very different from themselves.

• Every student in grades 6-12 is expected to find at least one academic passion and to work with others who share that passion in a group setting to achieve high goals.
• The School focuses on academic exploration and achievement while encouraging and promoting mental health by, among other things, keeping students off electronic devices as much as possible, and it encourages and promotes physical fitness as well.

The School's doors are open year-round. Its high school students volunteer to help run summer camps for younger students, and students also learn the importance of giving back to the community.

Officers, Directors, and Employees

• The Debtor's current officers and directors who receive salaries or benefits are:
  • Olanrewaju Fayiga, Principal and Member of the Educator Board, at an annual salary of $92,000.
  • Will Frazer, Principal and Member of the Educator Board, at an annual salary of $92,000.
  • Maxim Dolinsky, Member of the Educator Board, at an annual salary of $0.
• As of the Petition Date, the Debtor employs approximately 29 employees.

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Prepetition Obligations

The Debtor's assets generally include cash, accounts receivable, fixed assets, intangible assets, and real property, and are valued at approximately $9,796,377.25. No gross wages are owed as of the Petition Date.

Assets

• Cash and cash equivalents total approximately $698,162.18, consisting of funds in checking accounts at Capital City Bank and Chase Bank, a savings account at Chase Bank, and additional earmarked donations.
• The Debtor's real property, located at 4700 NW 89th Blvd, Gainesville, FL 32606, has a stated value of $8,500,000 based on its recent transaction cost, while the tax assessed value is $4,056,600.00. The Debtor is currently conducting investigations into the actual value of the property and the reasons for the difference between the sales price and tax assessed value.
• The Debtor also holds accounts receivable of approximately $201,920.16, office furniture and fixtures valued at approximately $181,941.96, school vehicles valued at approximately $40,000, utility deposits of $24,000, and other assets including leasehold improvements and undeposited funds.

Secured Debt

• Approximately $12,104,163.00 in asserted secured claims, including amounts owed to:
  • Capital City Bank — $5,477,991.00.
  • Kurt and Brittany Dudas — $3,175,000.00.
  • Joyner Construction Partners, LLC — $1,700,517.00.
  • Guarav Seth — $1,500,000.00.
  • Paul Stresing Associates, Inc. — $248,000.00.
  • NV5, Inc. — $2,655.00.
• The Debtor is conducting investigations into the propriety of all secured claims and believes actual secured claims are much lower.

Priority Unsecured Debt

• Approximately $667,298.24, including amounts owed to the Internal Revenue Service.

Nonpriority Unsecured Debt

• Approximately $2,082,093.45, consisting of trade creditors, various vendors, and loans from parent families who supported the School.
• The Debtor states that it should be clear to all parents and other community members who supported the School with loans that the School's intention is to honor those obligations in full as it restructures.

Executory Contracts

• The Debtor is a party to the School Transition and Asset Purchase Agreement entered into on December 17, 2025, with the Schraders and NCCS.

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Events Leading to Bankruptcy

Discovery of Financial Improprieties

While in a position of power, Mr. Schrader failed to honor his fiduciary duties to the School. Upon discovering significant financial improprieties, fraud, conversion, and civil theft, the School removed Mr. Schrader from the School as both an owner and officer, and the newly installed leadership took swift action to identify and rectify the financial issues he created.

• The School raised more than $5 million from the School's parent community in loans for the purchase of the School building. However, the Schraders then converted such funds to their personal uses, as well as use by NCCS, with neither the knowledge nor the consent of the parents or the School.
• Mr. Schrader executed the purchase of the School's building, located at 4700 NW 89th Boulevard, Gainesville, Florida (the "Building"), with School money, but then titled the Building in the name of NCCS, which currently holds legal title to the Building. The Schraders and NCCS acknowledge that at least $5,119,262.85 of the School's cash was used to purchase the Building in NCCS's name.
• The Schraders then entered into a purported lease agreement whereby NCCS purports to be the lessor and the School the lessee of the Building, effective May 23, 2025, at a rate of $150,000 per month for a 20-year term. Mr. Schrader executed this purported lease as both the lessor's and lessee's representatives, and the School believes the lease is unenforceable as a sham transaction designed to further misappropriate funds from the School.
• It has been recently discovered that the Schraders and NCCS caused additional School funds, over and above those used to purchase the Building, to be fraudulently transferred to the Schraders, NCCS, other Schrader entities, and NCCS board members.

The Transition Agreement and Its Breach

Once the financial improprieties, fraud, conversion, and civil theft by the Schraders and NCCS became known to the School, Will Frazer and the remaining independent School leaders addressed the problems through immediate and decisive action, removing Mr. Schrader from his positions. After negotiations, Mr. Schrader entered into a Transition Agreement dated on or about December 17, 2025 (the "Agreement") with the School.

• The Agreement provided for: (i) the Schraders' immediate resignation as officers; (ii) replacement of the existing Board with a new Educator Board with plenary power; (iii) efforts to convert the School to a 501(c)(3) entity; (iv) the School's receipt of ownership of the Building from NCCS; and (v) the Schraders' entry into an Irrevocable Proxy Agreement.
• Despite the transfer of Building ownership being fully negotiated and ready for implementation, the Schraders refused to move forward with the Agreement's Building transfer requirements, offered no good-faith alternative, and engaged in no substantive negotiation. The School contends this refusal constituted a material breach of the Agreement.
• Instead of conveying legal title to the Building, the Schraders and NCCS filed an eviction case against the School to try to remove it from the Building that was purchased with School funds.
• In early June, the School's lawyers sent a civil theft demand letter to James Schrader, Rachel Schrader, and NCCS seeking repayment of more than $5 million. That demand remains unanswered.

The Chapter 11 Filing and Go-Forward Strategy

The Schraders' and NCCS's misappropriation and theft of School cash, their fraudulent efforts to purchase the Building with School funds but then title it in NCCS's name, their conversion of other School cash to their own uses and benefits, their attempt to evict the School, and their failure to honor their obligations under the Agreement all led to the School filing for Chapter 11 relief in order to cut out the cost of state court litigation, enforce the Agreement, recover stolen funds belonging to the School, and transfer title of the Building properly to the School.

• The School also filed this Chapter 11 case to address all legitimate debts incurred by the School, including amounts owed to parents on their loans to the School, to teachers for promised bonus compensation, to contractors and subcontractors hired by Mr. Schrader for the renovation of the Building, and mortgage debt placed on the Building, as well as to honor all pre-petition agreements between the School and its teachers and the School and its parents/students. While the Schraders used the School as an instrument of fraud, the School has no intention of allowing that fraud to harm innocent creditors, teachers, parents, students, and vendors.
• The Debtor intends to pursue damages for breach of the Agreement through the related adversary proceedings and will pursue various forms of relief against the Schraders and NCCS, both to recover damages and to surrender any remaining control or ownership regarding the School and its Building. The School will also conduct a forensic review of all monies taken by the Schraders and NCCS and will pursue recovery of the same through appropriate litigation.
• The School will seek restoration of its ownership in the Building and will restructure any valid lien obligations on the same, if loans were legitimately used for School purposes. In addition to the School's own claims, many School families hold separate claims against the Schraders and NCCS relating to the false representations made by the Schraders regarding fundraising for the School to purchase the Building.
• The School is committed to continuing operations for the 2026-2027 school year without interruption to educational services, employee compensation, or day-to-day operations. The Debtor believes that Chapter 11 provides the best mechanism to legally and equitably address the School's financial situation, recover misappropriated funds, restore ownership of the Building, protect stakeholder interests, and ensure the School's continued operations for its students and families.

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First Day Motions

The Debtor does not anticipate seeking emergency relief; however, the Debtor will seek expedited relief via routine first-day motions, including the following:

• Motions for the Application to Employ Shumaker, Kendrick & Loop and other Professionals.
• Motion for Preliminary Injunction.
• Motion for Authority to Use Cash Collateral.
• Motion to Pay Pre-Petition Wages to Employees in the Ordinary Course.
• Motion Prohibiting Utility Providers from Discontinuing Services and Establishing Procedures for Assurance of Payment to Utility Providers.
• Motion to Assume Executory Contracts with Teachers.
• Motion to Assume Executory Contracts with Students/Parents.
• Motion for Turnover of the School's books and records by the Schraders.
• Motion for Turnover of the School email account used by its bookkeeper.