The St. Paul music school, which abruptly closed its doors two months ago, filed for Chapter 7 bankruptcy in federal court Thursday, the Star Tribune has reported. McNally Smith’s assets will be liquidated and creditors—some of them at least—will get paid what they’re owed.

McNally Smith was in the final week of its semester last December when Jack McNally, the chair of the school’s board of directors, unexpectedly announced that the school couldn’t afford to stay open—and couldn’t afford to pay faculty and staff for hours already worked.

The decision shocked McNally Smith students, who doubted that the credits they’d earned so far would be transferrable to other institutions, and caused special difficulties for international students, who had to scramble to find a way to continue their education in the U.S.

The bankruptcy filing offers some hope for unpaid McNally employees and contractors, but they’re not the court’s first priority. Under bankruptcy law, secured creditors (for example, a bank whose loan is guaranteed by a lien on a debtor’s property) get first crack at the assets.

After all, you can't spell "bankruptcy" without "bank."

