Karafin School in Mount Kisco seeks bankruptcy protection

BY BILL HELTZEL Bheltzel@westfairinc.com

The Karafin School Inc., operator of a high school for special needs students in Mount Kisco that was about to be evicted from its premises, has petitioned for bankruptcy protection.

Karafin declared $90,000 in assets and $2.6 million in liabilities, in a Chapter 11 reorganization petition filed April 18 in U.S. Bankruptcy Court, White Plains.

The school was established in 1972 to serve children with autism, emotional and learning disabilities and other health impairments. In 1982 it moved to an office complex on Radio Circle Drive near the Mount Kisco post office.

As recently as December, according to court documents, about 56 students from low-income communities in New York and Connecticut were enrolled in the school.

Karafin is involved in four lawsuits filed in recent months.

Last December the school sued its landlord, Kisco Radio Circle Associates, of Nanuet, Rockland County, to block an expected eviction.

Karafin did not dispute that it owed back rent, but it disagreed on how much it owed and asked Westchester Supreme Court to declare that the landlord may not cancel the lease.

In February, the landlord petitioned Justice Court of Mount Kisco for an eviction order, claiming the school owed $245,000 in back rent.

Then the landlord filed a complaint in Westchester Supreme Court against K3 Learning Inc., claiming that the Manhattan holding company for specialty schools was advising Karafin to pay creditors but not the landlord.

Also in February, a former school psychologist accused Karafin of retaliation for allegedly firing her because she complained about unpaid wages.

The Mount Kisco court ruled in favor of the landlord on April 17, according to a Westchester Supreme Court record, and the village court was about to issue a warrant of eviction.

By filing for bankruptcy protection, the four pending lawsuits were automatically halted.

Unsecured claims listed in the bankruptcy petition include:

• $519,306 to the New York State Education Department,

• $488,000 to New York City

Department of Education for excess tuition payments,

• $305,000 to JPMorgan Chase Bank for a U.S. Small Business Administration Paycheck Protection Program loan to retain 39 jobs during the Covid-19 pandemic,

• $304,449 to Kisco Radio Associates for rent,

• $209,108 to Marcus Kozien, the school counselor and individual education plan coordinator,

• $118,082 in state and federal payroll tax liabilities.

Renee L. Donow, of McConnellsburg,

Pennsylvania, owns The Karafin School Inc., according to the petition, and is the president, chief executive officer and board chairwoman.

Bart A. Donow is the executive director, according to the school’s website.

Karafin is represented by Nassau County attorney A. Scott Mandelup.

The good news came in the midst of the meeting an update that H.B. 6929, a bill designer to raise Connecticut’s film and digital media production tax credits from 30% to 37%, successfully made it out of a General Assembly committee and was headed for vote in the full legislature. H.B. 6929 is a keystone in the new organization’s mission of strengthening the state’s attractiveness and vitality as a production hub for the film and television industry.

The alliance is spearheaded by Jonathan Black of Chair 10 Productions, a production services company based in Newtown, who told the inaugural ed in judgments for the plaintiffs of about $1 billion.

According to the Cornell Law School’s Legal Information Institute, “Defamation is a statement that injures a third party’s reputation. The tort of defamation includes both libel (written statements) and slander (spoken statements).”

“There’s been a trend, particularly on social media, to make statements that are defamatory,” Jeffrey Buss, of the Yonkersbased law firm Smith Buss Jacobs LLP told the Business Journals. “I think people are going to have to be more thoughtful before opening their mouth.”

Buss sees the modern information age in which we live as a factor in providing more opportunity for libel and slander to occur and that every businessperson needs to understand where the line is that separates free speech from defamation.

“When people wrote things by hand or typed them out the old-fashioned way it was a slower process and I believe there was a little bit more thought put into a meeting’s attendees – creative artists employed on both sides of the camera that his goal was to bring economic opportunities to Connecticut.

“We want to make sure we create jobs that will create opportunities and bring everyone together,” he said. “And this is going to take a lot of effort to move this state and make it an amazing opportunity for all of us to have jobs.”

Black stressed that the tax credit was crucial in creating a permanent presence for film and television production in Connecticut. Unlike neighboring Westchester and Orange counties in New York or Jersey City in New Jersey, Connecticut does not home sound stage facilities that can accommodate productions year-round.

“We’re going to be trying to build soundstages,” Black continued. “Who wants to drive over the George Washington Bridge to get work? You want to do it here in your backyard. That’s the whole purpose of this – we want to do this.”

Black acknowledged his belated arrival to Connecticut, noting that he “lived in Los Angeles for 15 years and now I’m sitting on six acres of land. And I’m in heaven. I want to be 10 minutes from where we’re shooting.”

Beyond H.B. 6929, Black stated the alliance would seek to provide opportunities for Connecticut’s film and television professionals by launching a casting agency to represent union actors in the state and by hosting quarterly meetings to unite and update the local industry on developments impacting their livelihood.

“We want to double, triple quadruple this room,” Black told the attendees at the inaugural meeting. “We want to be able to pack places out and we want Connecticut to be the next place to go.”

The meeting was also addressed by Bob Dio, a board member of the alliance who is also a union actor and an instructor at the Connecticut School of Broadcasting.

“Our goal is to bring major film feature film productions and television series here to Connecticut,” Dio said. “Right now, most producers don’t think of Connecticut, where you’re currently squeezed out between New York, New Jersey, Massachusetts, and yes, even Atlanta, Georgia, who have hundreds of sound stages up and running. And that’s a fact. I was astounded when I heard that.”

Dio observed that while Connecticut has “a few independent filmmakers shooting in our state somewhat regularly,” he noted that Black “has been working closely with major studios to coax them to the Nutmeg State. They say they’ll come if we can prove to them that we have an infrastructure.”

Dio pointed out that while there were many supporters in Hartford of the alliance’s goals, there were also legislators who were confused about what they were trying to achieve.

“It’s amazing how many people don’t understand what we’re all about and how we make these things called films,” he said, recalling a legislator who assumed a film soundstage was a temporary structure that could be quickly disassembled and packed away when the production ended. “Jonathan and I looked at each other and kind of just said, ‘Oh, my God.’”

Dio concluded by stressing the need to show the wider entertainment industry that Connecticut is able to accommodate their business, adding, “As I steal this message from a well-known film: If you build it, they will come.” statement,” Buss said. “With email and then with texting and TikTok and all the new forms of communication the ease and speed with which you can make a statement has increased but people have not thought through clearly sometimes what the import is of their statement.”

Buss said he needs to compliment the lawyers for Dominion who did an extraordinary job of digging out information that included incriminating emails, texts and recordings demonstrating that Fox and its personnel knew that what they were reporting about Dominion being responsible for fraud in the 2020 Presidential Election was not true. They had built a case that observers feel, had it gone to trial, would have proven that Fox was acting with malice in its defamation of Dominion. In defamation suits against media companies, proving that a defamatory statement was made with actual malice can be difficult.

“There’s a lot of money that was obviously spent by both sides preparing this case and that’s far outside of what a ‘normal’ business would want to spend or be able to spend on this type of lawsuit,” Buss said. “The lawyers did an extraordinary job rep- resenting Dominion.”

Buss said that while the law didn’t change because of the Dominion/Fox outcome, the consciousness of the public may have gotten a little bit more sensitive to statements that have no factual basis.

“This case was brought in Delaware but the judge was required to apply both Delaware and New York law. He took the time to patiently go through almost every aspect of New York defamation law in the decision that he issued in March,” Buss said.

Delaware Superior Court Judge Eric M. Davis ruled in March that Dominion proved that statements made by Fox were false and that the case could proceed to trial before a jury. Davis wrote in his ruling that material Dominion presented made it crystal clear that none of the statements made by Fox about Dominion with respect to the 2020 election were true.

“You can’t erase things that are written in email; they’re backed up somewhere,” Buss pointed out. “With forensic examination of electronic data you can find comments that people utter without really thinking through what the ultimate context would be.”

Buss said that when a business is pre- paring material for publication in print, posting on the internet or otherwise being disseminated it is not always necessary to have it reviewed by an attorney if it has been prepared using good judgment and common sense.

“If you are making comments about your competitors there are a lot of issues that you need to be concerned about. If you’re going to make a statement it should be an opinion rather than a factual statement if you’re going to compare your company with some other company,” Buss said.

“Generally you can trumpet your own business without concern. It’s when you start criticizing another company that you have to be thoughtful about how you compare your business with theirs.”

Buss noted that libel and slander insurance coverage is available and some business insurance policies already may include protection.

“Business people need to think about what the costs would be if they get tied up in a defamation case,” Buss said, “It’s always better to be descriptive about your product and telling people why they should use your services and products. You don’t need to denigrate your competition.”