Judgment
against PSA
owners
By Linda Lemmon
Town Crier Editor
PUTNAM — In a stipulated agreement granted by a Connecticut Superior Court judge June 4, a Massachusetts foreign corporation was awarded a judgment of more $6 million against the owners of the Putnam Science Academy.
The stipulated agreement for final judgment saves the plaintiff and the defendants from a June 25 trial. There are no appeals. Raise Crest Education Inc. was awarded the $4,800,000 it lent D&M Group, LLC d//b/a as Putnam Science Academy and PSA Education Inc. starting in 2019. The 8 percent interest on that figure totaled another $1,690,958.91, plus costs of $3,964.25 plus related attorney’s fees of $52,750.50 for a total of $6,547,673.66.
In its amended complaint to the court in February, 2024, Raise Crest listed the particulars of the two promissory notes and alleged fraud  by Putnam Science.
Raise Crest said that D&M Group LLC was in breach of contract. Putnam Science, Nov. 24, 2019,  executed a convertible promissory note, promising to repay Raise Crest $1 million plus interest.
On Jan. 22, 2020 another note was executed promising to repay Raise Crest $3.8 million. That was paid in several separate installments. The original maturing date of both those notes was Dec. 23, 2023.
Subsequently both agreed to adjust the maturing date for those two notes to Dec. 1, 2021.
“Sept. 30, 2020 through April 28, 2021, Putnam Science transferred three of the four properties it owned to co-defendant PSA for no consideration.”
The properties transferred were: 26 Church St., 72 Church St. and 18 Maple St.
Putnam Science missed the note payment deadline and Raise Crest, Dec. 16, 2021, then demanded immediate payment of all the amounts due, plus interest.
Putnam Science asked for six months for repayment.
As of Dec. 23, 2023, the amended complaint said, Putnam Science failed to make payment in full and the interest amount due.
Count two of the amended complaint, “Fraudulent Transfer Pursuant to Conn. Gen. Stat 52-552 as to D&M Group, LLC d/b/a Putnam Science Academy,” Raise Crest said the real estate conveyances were fraudulent transfers because they were made “after the plaintiff’s claims arose; after the defendant knew it was exposed to significant liability in excess of its assets with the intent to hinder, delay or defraud or without receiving a reasonably equivalent value.
Count three on the fraudulent transfer says Putnam Science made the property transfers “to an insider — its alter ego and affiliate PSA.” Raise Crest asked the court to reverse the transfers.
(Around that same time, facing overdue taxes, in 2021 the property owners transferred all but 55 Gilman St. into the tax-exempt Putnam Science Academy holdings. D & M’s property at 55 Gilman St. is still taxable — Tax Woes subsection - see below)
Raise Crest Education Inc. operates New England Innovation Academy, a Massachusetts foreign corporation founded in January 2022. The founder, treasurer and trustee is listed as Raymond Chang. It operates a school in Massachusetts.
On May 30, the judge approved an order for prejudgment remedy that Raise Crest can attach to the value of $4.8 million the following estate of PSA Education, Inc.: 72 Church St., 15-23 and 29 Marshall Street and 55 Gilman St.
Lis Pendens
In addition, a lis pendens was filed at Town Hall May 29. The plaintiff is listed as Shichao Zhang and the defendants are D&M Group, LLC, PSA Education, Inc. Xiaoqing Yuan, Yanqin Ding, Yuan Liu, Xiaohong Yan, the IRS ($300,000) and Raise Crest Education Inc. The civil action, returnable to court June 25, is brought to foreclose real estate taxes and sewer usage liens in favor of Shichao Zhang. It lists the real estate affected as: 85 Pomfret St., 55 Gilman St.
A lis pendens is a written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it.
Purchased in 2015
When he bought the school in 2015, school President Dr. Tieqiang Ding said: “This is a new day that I’m very excited about for our students and the town of Putnam.”
In May of 2015 the former owners of Putnam Science Academy, the Wellspring Foundation, unexpectedly announced the closing of the school that had been in existence for more than a dozen years.
Tax Woes in 2022
Nearly $900,000 came into the town coffers thereby removing the Putnam Science Academy and D & M holdings from town’s Aug. 23 tax sale, according to Tax Collector Melissa Alden.
D & M had been the owner of 55 Gilman St., 26 Church St., 18 Maple St., 72 Church St. and 15-23 Marshall St.
D&M is not a tax-exempt entity. Taxes to the town and to the Special Service District were not paid in 2018, 2019 and 2020. The taxes, interest and liens for both the town and the Special Service District totaled $894,882.11 and the town placed all the properties on the list for the tax sale.
Alden said that in 2021 the property owners transferred all but 55 Gilman St. into the tax-exempt Putnam Science Academy holdings.
D & M’s property at 55 Gilman St. is still taxable.
She said that the payments to the town began in July and continued through Aug. 8 when the final property was paid in full. She added all delinquent taxes have been paid to the town and the district and that no properties owned by PSA or D & M will be involved with the tax sale.
A breakdown:
55 Gilman St.
Taxes/interest/liens paid: $159,350.24 (town: $111,160.42 and district: $48,189.82)
26 Church St.
Taxes/interest/liens paid: $31,992.67 (town: $22,325.00 and district: $9,667.67)
18 Maple St.
Taxes/interest/liens Paid: $337,455.62 (town: $235,497.23 and district: $101,958.39)
72 Church St.
Taxes/interest/liens paid: $304,757.14 (town: $212,498.73 and district: $92,258.41)
15-23 Marshall St.
Taxes/interest/liens paid: $61,326.44 (town: $42,828.33 and district: $18,498.11)
Total town collections: $624,309.71
Special Services District total: $270,572.40

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