(1) An
authorizer may request that the commissioner permit external control over certain
functions of a charter school or charter management organization by submitting to
the commissioner and the charter school or charter management organization a
concise written statement identifying the emergency that justifies external control
and the form or forms of external control requested. The authorizer shall state
clearly if it is requesting an order of reorganization. The commissioner may
authorize external control over a charter school or charter management
organization by issuing a temporary order as provided in subsection (2) of this
section or a preliminary order as provided in subsection (3) of this section.
(2) The commissioner may issue a temporary order in the event that
immediate and irreparable injury, loss, or damage will result from the identified
emergency before the charter respondent is able to state its opposition and before
the authorizer certifies in writing or in person to the commissioner the efforts that
have been made to give notice to the charter respondent. A temporary order issued
pursuant to this subsection (2) shall state the date and hour of issuance, define the
injury, state why the injury is irreparable, and state why the temporary order was
given without notice. A temporary order issued under this subsection (2) shall be
valid for ten days and may be extended for up to an additional ten days for good
cause shown. The authorizer shall immediately provide the charter respondent with
a copy of any temporary order issued pursuant to this subsection (2). A charter
respondent shall provide an authorizer two business days' notice prior to requesting
that the commissioner dissolve a temporary order issued pursuant to this
subsection (2).
(3) The commissioner shall issue a preliminary order only if:
(a) The charter respondent received two business days' written notice that
the authorizer has requested external control over certain functions of the charter
respondent and the basis for the request;
(b) In the case of a charter respondent that is a charter management
organization, authorizers of each of the affected charter schools have received two
business days' written notice of the request for external control;
(c) The authorizer requesting external control and all parties that received
notice have had the opportunity to meet with the commissioner to present such
evidence and argument as the commissioner finds appropriate under the
circumstances. In any meeting held before issuing a preliminary order pursuant to
this subsection (3), the commissioner may accept evidence and arguments from the
parties involved as he or she deems appropriate, but neither a formal adversarial
hearing nor application of the rules of evidence shall be required.
(d) Following a meeting held pursuant to paragraph (c) of this subsection (3),
the commissioner finds and determines that the authorizer has demonstrated an
emergency and the risk of irreparable injury resulting from the emergency justifies
an intrusion on the internal operations of the charter respondent.
(4) The commissioner may demand production of information from the
charter respondent that may be necessary to conduct an investigation pursuant to
this section, may issue subpoenas as otherwise provided for in section 24-4-105 (5),
C.R.S., and may draw appropriate inferences from failure of any party to promptly
comply with such requests.
(5) A preliminary order issued pursuant to subsection (3) of this section shall
be valid for one hundred twenty days and may be extended for up to an additional
one hundred twenty days, upon good cause shown.
(6) (a) A temporary or preliminary order may appoint the authorizer or
another entity or person to act as a fiduciary; except that, if more than one
authorizer is a party to the proceeding or if the authorizer is requesting an order of
reorganization, the commissioner shall appoint a separate person or entity that is
not a party to the proceeding to act as a fiduciary. The fiduciary may exercise,
subject to the limitations set forth in paragraph (b) of this subsection (6), the
powers over and for the charter respondent that are ordinarily exercised by the
charter respondent's board of directors and may take action respecting excess
benefits as authorized pursuant to section 22-30.5-704.
(b) A temporary or preliminary order shall not authorize, nor be construed to
permit, a fiduciary to:
(I) Conclude, dissolve, relinquish, or surrender the charter contract;
(II) Effect nonrenewal or revocation of the charter contract;
(III) Negotiate, renegotiate, or amend the charter contract;
(IV) Exercise the legal standing of the charter respondent in any
administrative or court proceeding other than one brought pursuant to this section;
except that the fiduciary may seek recovery of unpaid moneys due to the charter
respondent from an authorizer;
(V) Transfer into a trust the assets of the charter respondent;
(VI) Repeal, alter, amend, restate, or in any fashion modify the charter
respondent's organic documents;
(VII) Remove, recall, or appoint any member of the charter respondent's
governing board or officers;
(VIII) Take any action that is reserved for the membership of a charter
respondent that is organized as a membership organization; or
(IX) Take any action that is not within the power of the charter respondent's
governing board.
(7) The commissioner may require a fiduciary to provide evidence of
appropriate insurance coverage, including but not limited to appropriate
certificates of insurance. The insurance coverage shall be reasonably adequate to
protect against risks of liability for any actions taken under an order granted
pursuant to this section.
(8) (a) If an authorizer has requested an order of reorganization and the
commissioner, after appropriate proceedings pursuant to this section, has
appointed a fiduciary other than the authorizer to exercise certain powers, the
fiduciary shall independently determine whether to continue to request the order of
reorganization. An order of reorganization shall be authorized only if it is issued in
compliance with the processes, standards, and purposes set forth in this section.
(b) A fiduciary other than an authorizer may request an order of
reorganization at any time while a preliminary order or an extension of a preliminary
order is pending, so long as the fiduciary provides at least ten days' notice to the
charter respondent, the authorizer, and the commissioner. The fiduciary shall
specifically state in the notice the powers of reorganization he or she is requesting
and the reasons justifying the request. Notwithstanding the limitations placed on
the powers of a fiduciary acting under a temporary or preliminary order, as set forth
in subsection (6) of this section, the powers of reorganization shall only include one
or more of the following powers:
(I) To fill one or more board vacancies, notwithstanding the charter
respondent's organic documents;
(II) To remove one or more board directors or officers, notwithstanding the
charter respondent's organic documents; or
(III) To make specific, stated modifications to the charter respondent's
organic documents, notwithstanding the process for amendment or restatement
otherwise prescribed in those documents.
(c) The commissioner may issue an order of reorganization only after giving
the authorizer and the charter respondent a reasonable opportunity to be heard,
and then only if the commissioner finds that the risks created by the emergency to
the charter respondent and the authorizer cannot be resolved by any less restrictive
means. In any meeting held before issuing an order of reorganization, the
commissioner may accept evidence and argument from the parties involved as he or
she deems appropriate, but neither a formal adversarial hearing nor application of
the rules of evidence shall be required.
(d) An order of reorganization shall be valid for the balance of the term of
any pending preliminary order or for sixty days, whichever is greater, and may be
renewed for an additional thirty days upon good cause shown. An order of
reorganization shall be valid for no more than ninety days.
(9) The fiduciary shall submit appropriate financial information to the
commissioner and the director of public school finance within the department of
education and provide copies to the charter respondent and authorizer. The charter
respondent and authorizer may submit additional information to the director of
public school finance. After receipt of all pertinent financial information, the
director of public school finance shall make a written recommendation to the
commissioner.
(10) A temporary or preliminary order or an order for reorganization granted
pursuant to this section shall state the reasons for issuance; be specific in its terms;
and describe in reasonable detail, without reference to the request or other
documents, the act or acts authorized. An order granted pursuant to this section is
binding only upon the charter school and its employees. An order appointing a
fiduciary may specify or limit the fiduciary's powers and may direct the fiduciary to
act only upon particular issues or only to exercise certain powers.
(11) Expenses incurred by an authorizer in pursuing a proceeding pursuant to
this section shall be borne by the authorizer, and expenses incurred by a charter
respondent in defending any proceeding pursuant to this section shall be borne by
the charter respondent. Expenses incurred by the department shall be borne
equally by the authorizer and the charter respondent. Expenses incurred by a
fiduciary shall be submitted to the charter respondent and commissioner for
approval and, after the commissioner resolves any disputed charges, shall be borne
by the charter respondent.
(12) Notwithstanding any other provision of Colorado law, including but not
limited to the Colorado Revised Nonprofit Corporation Act, articles 121 to 137 of
title 7, C.R.S., or any provision of a charter contract to the contrary, the powers
granted pursuant to this part 7 shall be effective and valid as a matter of law.
(13) Nothing in this part 7 shall limit the authority of an authorizer to exercise
any contractual rights, including any remedies, emergency or otherwise, for breach
of a charter contract. A charter contract provision that purports to grant authority
to an authorizer to exercise emergency powers as described in this part 7 shall be
construed, if possible, to be consistent with this part 7. A provision construed to be
inconsistent with this part 7 shall be deemed contrary to public policy, void,
unenforceable, and of no legal effect. The burden shall be on the party asserting an
inconsistency to demonstrate that such a provision is inconsistent with this part 7.
(14) An order issued pursuant to this section shall be final and binding and
not subject to appeal. A charter respondent may seek judicial review of an order
issued pursuant to this section under rule 106 (a)(4) of the Colorado rules of civil
procedure; except that a temporary order shall not be subject to judicial review. A
charter respondent may file an action for judicial review in the district court for the
city and county of Denver or the district court in the county in which the charter
respondent is located.
(15) An order issued pursuant to this section shall not be deemed to be an
appointment of a trustee or receiver under the terms of any financing of a charter
school facility or other instrument.
(16) The commissioner may fill any vacancy created by the death or inability
of a fiduciary or, for good cause shown, may remove a fiduciary that is exercising
powers pursuant to a preliminary order or order of reorganization and appoint a new
fiduciary.
(17) A meeting conducted by the commissioner pursuant to this section shall
be open to all parties to the proceeding. An order of the commissioner issued
pursuant to this section and all requests for orders, by any party, shall be
considered public documents.
(18) The state board is authorized to adopt rules, pursuant to the State
Administrative Procedure Act, article 4 of title 24, C.R.S., for the implementation of
this section.