A move has been made to wind up an Aberdeen school trust at the centre of a long-running multi-million-pound legal dispute.
Around 100 staff were made redundant when Oakbank School, on Mid Stocket Road, closed in 2008 because of debts and falling referrals, with pension chiefs at Aberdeen City Council later taking legal action against the school’s trust to recover cash used for former employees’ pensions.
The two parties eventually reached an agreement for the board to pay back £4 million in payments to the local authority’s North East Pension Fund.
Since then, trustees have finished paying off their debts and the trust’s solicitor was instructed to wind up the trust yesterday.
Former council finance convener Willie Young, the chairman of the trust which was made up of six councillors, said: “I have informed the Office of the Scottish Charity Regulator (OSCR) of the trustees’ decision and as the trust is unable to perform its trust obligations due to the financial constraints it now operates under, the trustees only viable solution is to wind up the trust.
“While it is extremely sad that the Oakbank School Trust is to be wound up, at least it has been done in the knowledge that all debt has been repaid with ex-employees receiving their pension rights in full.
“There is no doubt that Oakbank School provided valuable support to children and young vulnerable adults through their social life and beyond.
“I am positive many former employees, school residents and trustees at Oakbank School have many fond memories of their time at the school.”
The issue prompted repeated political spats between the previous Labour-led council administration – who had members in the trust – and opposition SNP group.
The trustees laid the blame on a previous SNP and Liberal Democrat administration who they claim “walked away” from the trust, leaving a “mountain of debt” and leading to the school’s closure.
The former residential school, which taught children with emotional and behavioural problems, was sold for £7m to city developer Carlton Rock, who built more than 100 homes at the site.
OSCR could not be reached for comment.