NEWFANE — A Montpelier man who is described as “a commercial real estate developer” appears to have reached a financial settlement with the organization that attempted to bring a new kind of hybrid school to the campus of Marlboro College.
According to documents filed with Windham Superior Court, Civil Division, William Kaplan was hired at $10,000 a month by Democracy Builders Fund 1 as a “higher education real estate consultant to assist with the sale and development of lands formerly owned by Marlboro College.”
In late September 2021, Potash Hill Llc, a non-profit corporation established by Marlboro Music, paid $2,740,000 to Democracy Builders Fund 1 for possession of the campus.
Earlier, in May 2021, Kaplan, who is the chairman of the board of the Montpelier Development Corporation, claimed Democracy Builders owed him $92,400 for his services, plus 10 percent of the proceeds from the sale of the campus.
On Monday morning, Judge Katherine Hayes presided over a status conference to hear from attorneys for Kaplan and DBF 1.
Mark Oettinger, attorney for Democracy Builders, told Hayes a settlement agreement has been reached, “in principle.”
“I have sent the release out to the board chair of DBF who is in California,” said Oettinger. “I am expecting to have that release back. Once we have it back, pending the signed release from Mr. Kaplan ... we will be entering a stipulation to dismiss.”
In a September email discussion between Oettinger and Kaplan’s attorney, Ilerdon Mayer, DBF agreed to pay Kaplan $92,400, but not the 10 percent fee on the sale.
“Just to be clear, this is our best and final offer, and counteroffers will not be considered,” wrote Oettinger.
“[A]fter much haggling,” wrote Mayer, “[Kaplan] agreed to accept your offer of $92,400 as full and final settlement.”
In filings submitted prior to the settlement, Oettinger wrote that Kaplan “may have been hired by” Seth Andrew, Democracy Builders’ former CEO “for purposes that are not fully understood by DBF’s Board of Directors.”
Andrew was arrested last April in Manhattan and charged with one count of wire fraud, one count of money laundering, and one count of making a false statement to a bank for allegedly stealing $218,005 from Democracy Prep, the charter school network he helped to found in 2005.
The U.S. Attorney’s Office for the Southern District of New York contends Andrew used the stolen funds to obtain a savings on a mortgage for a multimillion-dollar Manhattan apartment.
According to documents filed in federal court, the case against Andrew has been resolved, but the details of that resolution have not yet been released.
Oettinger noted that Democracy Builders has had “limited access” to Andrew due to his ongoing legal troubles.
During the Monday hearing, Mayer told the court that even though a settlement had been reached in September, “unnecessary legal fees” were incurred when Oettinger filed a response to the initial claim in October.
“We settled this prior to an answer being filed and yet they filed an answer raising issues ... it’s baffling to me,” said Mayer. “I want to get it done ... But I’m still here with this case that doesn’t want to go away.”
“I really hope it does,” said Hayes, who said Mayer doesn’t need to respond to DBF’s answer.
Hayes agreed to schedule a hearing in 30 days, even though it appears the agreement will be finalized before then.
“I do bristle somewhat at the accusation that we are running up fees,” said Oettinger. “This case is one of the most complicated cases I’ve ever been involved with ... I’ve done everything I can to try to bring this thing to conclusion ... I think we are on the brink of doing so.”
Andrew came to Windham County in 2020 with a grand vision to open a new type of hybrid school, named Degrees of Freedom, dependent on federal grant money on the campus of Marlboro College, which merged with Emerson College in Boston and sold the campus to Democracy Builders Fund 1 for $225,000 in cash and the assumption of $1.5 million debt the college owed to the Marlboro Music Festival.
The school was close to opening, though delayed by the COVID-19 pandemic, when Andrew was arrested and charged with one count of wire fraud, one count of money laundering, and one count of making a false statement to a bank.
Following his arrest, plans to open the school were put on hold and eventually cancelled. In July, Marlboro Music, which has hosted a summer music festival on the campus for the past 70 years, purchased the entire campus and its buildings through its subsidiary, Potash Hill.
Following the hearing, Oettinger told the Reformer there are a number of other creditors who are expecting payment for various services, including a Washington, DC attorney who is asking for $500,000. He said at this time, that information is not available to the public.