Sunday, August 9, 2015

DOES IT PASS THE "STINK TEST"? Grand Traverse Academy Board Decides Not To Pursue Recovery Of $1.67 Million Dollars From Steven Ingersoll's Smart Schools Management, Inc.; "Lawsuit Not A Legal Option", "The Hazards Of Arbitration Weigh Against Recovery"


After nearly 16 months of conflicting public statements (beginning shortly after Steven Ingersoll's federal fraud indictment was unsealed on April 10, 2014), the Grand Traverse Academy Board of Directors has formally decided against taking any legal action to recover the estimated $1.67 million dollars owed to the Traverse City charter school by its former management company, Ingersoll’s Smart Schools Management, Inc. 

Kerry Morgan, the Board's attorney, responded late Friday afternoon to my inquiry about the status of its recovery effort, stating exclusively in an email to Miss Fortune that “litigation is legally precluded because the SSM and GTA contract contains a mandatory arbitration clause. Thus, a lawsuit is not a legal option.”

And although a July 9 Interlochen Public Radio interview featured Board President Brad Habermehl claiming that the school’s attorney was “looking at options for recovering the $1.6 million”, including bringing in an outside arbitrator, Morgan contradicted Habermehl's earlier assertion.

Morgan revealed in his August 6 email that “the [Grand Traverse Academy] Board is not inclined to file an arbitration demand either.”

In his email, Morgan stated “the hazards of arbitration weigh against recovery.” Claiming that “too much publicity surrounding this case has lacked this objectivity”, Morgan continued, saying “considering legal action requires a sober assessment of the likelihood of success on the merits.”

On the whole, Morgan revealed, the Board’s assessment of the relevant facts “weigh against arbitration.”

“Second, in addition to the hazards of arbitration, the practicality of obtaining an uncollectable judgment also weigh against arbitration.  By way of example, the Court entered an Order just this morning allowing Ingersoll’s attorney to withdraw because Ingersoll had no assets even to pay him for the trial or work performed in 2015.”
[NOTE: Judge Ludington's August 6 order granting attorney Martin Crandall's motion to withdraw did not comment on the state of Ingersoll's “assets”.]

Continuing in the email, Morgan states the “United States also asserts Ingersoll owes $1,673,025 in back taxes; with applicable penalties and interest, the total is $2,699,673.48. Several Ingersoll properties in Bay City are also foreclosed.  These large debts and claims suggest strongly that Ingersoll is, has been and will be uncollectable.  If Ingersoll is imprisoned, an arbitration proceeding without his physical ability to appear is shortsighted. SSM as a wholly controlled and funded entity of Ingersoll shares this same uncollectable fate.” 

All in all, according to Kerry Morgan, any GTA recovery is “remote”.

But does this pass the “stink test”?

After 16 years of taking satirical aim at the hypocrisy of politics and the fatuousness of the news media, Jon Stewart said goodbye to “The Daily Show” last Thursday evening with a farewell broadcast that mixed wry parting shots with what the New York Times called “earnest displays of emotion and with a passionate speech urging his audience not to accept falsehoods and misinformation in their lives.”

“Whenever something’s been titled Freedom Family Fairness Health America, take a good long sniff,” he said.

The only way to combat the relentless intrusions of dishonest people, Mr. Stewart said, was through vigilance. “Their work is easily detected, and looking for it is kind of a pleasant way to pass the time,” he said.

“So if you smell something, say something,” Mr. Stewart added.

And tomorrow, courtesy of Nose 2.0, Miss Fortune puts the Grand Traverse Academy's decision to the “stink test”.



  1. I thought Mr. Morgan is a licensed attorney? Surely he cannot think we are all stupid enough to recognize that there is no management agreement in the country that protects parties in the case of fraud and embezzlement. Those things are not arbitrated, they are prosecuted. Good try though!

    1. UNLESS, the discovery phase of a trial would reveal more than the current management company and members of the appointed "school board" want the public and the parents of the students they've duped into attending their school to see. What are the chances Mark Noss had no idea what was going on with Ingersoll? He was his business partner in their snake oil vision therapy racket. So is Habermehl. The board is made up of their friends and family. They were all unaware of what was going on?

      And never forget, that $1.6 million is taxpayer money. Money that should have gone to a REAL public school like TCAPS. The purpose of for-profit charter schools is to take away money from the genuine school district in your community.

      Up North Progressive

  2. The fraud continues.

  3. I thought debt forgiveness became a taxable event. Will the Ingersoll get to pay taxes on the debt forgiven?