Ronald Pfuhl's daughter was a student at McNally Smith College of Music when it abruptly closed in December.

While his daughter, Nichole, quickly found another school, Concordia University, St. Paul, Pfuhl was out the $12,000 he paid for spring semester — money he'd been saving since before she was born.

When the school initially filed for bankruptcy, he was hopeful.

"The assets far outweighed what was owed, and I had some high hopes that I would be paid in full," he said.

Those initial filings showed the school to have assets estimated at $10 million to $50 million, and owing less than $10 million. Ramsey County valued the building at 19 Exchange Street in downtown St. Paul at $13.6 million in 2017.

Those numbers turned out to be much rosier than the reality.

"From what I've seen, it seems like a lot of the money just isn't there anymore," Pfuhl said.

The last graduation ceremony at McNally Smith College of Music took place Saturday, Dec. 16, 2017. Peter Cox | MPR News

Here's what happened with the school's assets:

Exchange Street Partners bought the mortgage on the building for about $2.8 million. The mortgage is actually now worth around $4.5 million.

In order to pay them, and other creditors off, the trustee would have to get more than $4.5 million from the sale of the building.

Federally appointed trustee Patti Sullivan said adding to that financial strain, the building's maintenance and interest were costing about $50,000 each month. "It was really a rock and a hard spot."

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Sullivan tried to find a buyer for the building. But no one offered a bid.

Ultimately, she and Exchange Street Partners struck a deal. Exchange Street Partners would release the school from its $4.5 million mortgage, and Exchange Street would take ownership of the building. The ownership group also agreed to take on three mechanics liens and a Small Business Administration loan. That deal takes care of the secured creditors in the case.

What's left are the unsecured creditors made up of former employees, contractors owed money, among others, who will be paid from the proceeds of auctions of school property, such as musical instruments and office equipment.

"The recent auction brought in just under a million dollars, it was about $909,000, for the personal property," Sullivan said. The new building owners also purchased some property in the building for $60,000.

Those funds will first go to pay priority unsecured creditors, such as faculty, staff and student workers who were not paid for their last weeks of work. Sullivan is still looking into it, but believes those, like Ronald Pfuhl, who paid tuition, will also be priority creditors.

But that pool of money will also have to cover more than $200,000 in expected administrative costs like attorneys, auctioneers and the trustee. But Sullivan said there might be some additional assets that can be recovered.

"I certainly am trying to help the students and professors and so even though the auction is over, I'm certainly still not done exploring other avenues of asset recovery," she said.

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Sullivan is still wading through and verifying the more than 240 claims made by unsecured creditors.

She hopes some distributions can be made to creditors by the end of the year.

As for the former McNally Smith building, that also houses the History Theater, Todd Geller, a director with Exchange Street Partners, said there is no immediate plan for the property.

In an emailed statement he wrote, "We are in the process of developing a marketing plan that will effectively expose it to prospective tenants and users in the Twin Cities marketplace and best maximize the property's potential. With the redevelopment of the property, we are certainly interested in contributing to the continued vibrancy of downtown, and the greater St. Paul community."

St. Paul's Planning and Economic Development office did not respond to requests for comment about the future of the property.