A U.S. Bankruptcy Court judge has ordered the owner of a defunct chain of career training schools to return property worth more than $750,000 to its parent company after finding that he transferred the property to himself and his family shortly before the company filed for bankruptcy in 1990.
David Lawson, owner of National Business School, was ordered to return a $650,000 property in Gaithersburg and almost $133,000 to the school's parent company, Market Tire Education Services Inc., said an order signed Monday by Bankruptcy Court Judge L. Edward Friend II in Rockville.
Mr. Lawson is the sole owner of Market Tire.
The court authorized James P. Koch, an attorney and the trustee in the case, to sell the property.
Market Tire Educational Services ran auto repair schools in Washington and on Hilton Avenue in Baltimore, said Michael Waller, a spokesman for Mr. Koch. The company also ran a law enforcement school in Washington, and Mr. Lawson's office was in Rockville.
The schools closed in late 1989 or early 1990, said Michael Tankersley, an attorney who represents former students at the Washington-area schools in a class action suit against the U.S. Department of Education and others.
The suit claims students they paid tuition with federally guaranteed student loans and were stuck with loan bills when the school closed before they completed their education.
In the suit, the students seek cancellation of their loan obligations. Mr. Lawson and Market Tire are not defendants in that action.
The transfer of the real estate, a Gaithersburg tire store, to a partnership led by Mr. Lawson and his wife was designed to raise money to repay tuition to dissatisfied students, but they were never paid, Mr. Koch and Mr. Tankersley said.
Mr. Koch said Mr. Lawson converted company equipment, a Porsche and life insurance policies worth $67,000 to himself or his family. Judge Friend dismissed Mr. Koch's request to require Mr. Lawson to return an additional $182,000 he had transferred from the company to himself and $78,000 in payments to a bank creditor for land titled to Mr. Lawson personally, said Stephen A. Bogorad, Mr. Lawson's attorney.