Purchaser’s Woes Cast Pall on Sale of School

A hitch has developed in the first sale of a school closed by the Los Angeles school district.

The retirement community developers who agreed to buy Oakdale Avenue Elementary School in Canoga Park asked the district’s Building Committee on Thursday to give them more time to pay a $150,000 deposit because their company, The Farm, recently filed for protection under Chapter 11 of the federal bankruptcy codes.

The Building Committee asked Robert Niccum, the district’s chief realty agent, to draft a report on the request, the prospects of The Farm securing financing to complete the sale and the status of the bankruptcy reorganization. He is to present the report June 10.

“They want to go ahead with the project, and I personally feel that, if it takes 57 extra days for them to come up with the money, we should give them the extra time,” said Larry Gonzalez, the board member who chairs the Building Committee.

Selling Difficulty Cited

“Selling schools is not as easy as some people would think,” he said.

In November, The Farm of Lake Elsinore bid $2.6 million for the school, which was closed because of low enrollment. The company has already paid the district $50,000, but it was unable to come up with the $100,000 balance of the down payment by the May 20 deadline.

Wayne Odekirk, president of The Farm, his brother Dale and their attorneys said they believe that they can get financing to complete the acquisition of the 6.3-acre school site.

Since 1976, the Odekirks have been involved in the development and promotion of a 1,520-acre mobile-home retirement community near Lake Elsinore. When they won the bidding for Oakdale School, Wayne Odekirk said he wanted to develop the site into a retirement community.

The Farm filed for Chapter 11 protection in April. Records from U.S. Bankruptcy Court in San Bernardino show that the firm owes about 900 investors $12 million and that it owes financial institutions an additional $25 million.

Dozen Suits

William Lobel, the Newport Beach attorney representing The Farm, said about a dozen of the company’s creditors had filed civil suits against it, some alleging fraud. According to court records, some of The Farm’s investors contend that they were incorrectly told that their money was backed by land, which they interpreted to mean that the land would be sold to repay them if The Farm were unable to pay them back.

Last week, Judge David Naugle approved The Farm’s reorganization proposal, under which the company will be turned over to a board of directors elected by the creditors. The new directors will decide which of The Farm’s properties will be developed and which will be sold so creditors can be paid.

The future of Oakdale School is unclear.

Transfer of Property

Before The Farm filed for reorganization, the Odekirks transferred the property from their company to their personal holdings, said Lobel and Niccum.

“If The Farm wanted to take it back, the Odekirks will be willing to give it back,” Lobel said. “They are not trying to hide any assets.”

The Farm’s successful bid for Oakdale School made it the first of the 22 Los Angeles schools closed because of low enrollment to be sold.

Four of the 19 schools closed in the San Fernando Valley have been converted to other district uses, such as magnet schools and community adult schools. Four others have been leased by operators of private schools. One was leased by a television production company. Nine remain vacant.

There has been some discussion by the district’s staff of reopening one of the schools to accommodate the fast-growing school population in the East San Fernando Valley, East Los Angeles and the central city.