BOSTON – The Hellenic College and Holy Cross Greek Orthodox School of Theology is experiencing financial difficulties so severe that among the remedies under consideration is "the selling of assets." Persons in the leading circles of the school have known about the crisis for several months, but administration officials have made efforts to downplay the situation.

At the end of April, information began to surface in internal memos, and other financial documents and reports which have come to the attention of The National Herald.

Specifically, in a letter dated May 6, 2003, sent by the school's President, Protopresbyter Nicholas Triantafilou, to the members of the Board of Trustees, in light of the Friday, May 16 meeting of the board, presided over by Archbishop Demetrios of America, he wrote among other things, "We currently have an outstanding line of credit balance of $1 million (expected to grow to $1.5 million by June 20, 2003), and a mortgage in the amount of $2.6 million," Fr. Triantafilou continued, "Until those obligations are absolved, our team is handicapped."

Fr. Triantafilou made a personal please to the trustees telling them openly, "Our school needs your help. We respectfully come to you, for we need your covenant and strong commitment. Resources are available in our immediate and greater community to erase our indebtedness and to responsibly expand our horizons. As highlighted in Exhibit B, the alternatives are not attractive."

In a report attached to Fr. Triantafilou's letter is a paragraph titled "Alternatives," which outlines specific proposals for finding a way out of the school's difficulties: "If the leadership and community do not support the school's expansion efforts, then they should consider downsizing operations considerably. Currently, the school has 76 full-time employees. On average, 16 full-time employees cost the school approximately $1 million in salary and benefits. In addition, the school needs to consider additional means of raising money, including the selling of assets. Please note the benchmark analysis on page 7 of the budget package. Andover Newton School of Theology has sold some assets to finance some of its requirements over the last two years and avoid debt."

Years ago, during Archbishop Iakovos' Archbishopric, Ministry plans were underway to sell a big chunk of the school's real estate property to build homes for the aged. The sale was canceled at the last minute after The National Herald revealed that the construction company had filed for bankruptcy.

In documents which are classified as "Company Confidential:" it has been reported that all of the school's assets have been frozen: "Between the $2.6 million mortgage and the line of credit, Citizens Bank has as collateral virtually all the assets of the School."

According to the same report, the Archdiocese owes the school as of May 2003, $600,000 from the annual allowance of $1.2 million. The Archdiocese is obliged to send the school $100,000 per month but, as the Herald has reported, due to its own troubled financial situation, the Archdiocese finds it cannot fulfill its obligation to the school.

Hope has been expressed that the Archdiocese will be able to send $400,000 to the school by the end of June 2003.

The report reveals among other things that "a series of aggressive assumptions in preparing the June 30, 2003 Budget (student body count, operating costs) were incorporated in an attempt to offset the significant decline in budgeted gifts and donation income. As a result, the school's borrowing this year increased substantially."

The report includes a paragraph outlining critical success factors for this year's budget in the event that some of the following become a reality:

1) Grow student population from 175 to 200 while controlling student discounting through a more practical and objective approach to allocating scholarships and award monies based on need and merit.

2) $1.2 million in Archdiocese support. This assumes the Archdiocese ends the year owing the school $200,000. As of May, the Archdiocese owes the school approximately $600,000. If the Archdiocese ends the year owing the school more than $200,000 (the same as last year), then the school's borrowing needs will exceed $1.5 million for the school year ending June 30, 2003.

3) Raising $1.8 million in naming right funds (unrestricted monies) during the school year will help get the school to a cash neutral position for the school year ending June 30, 2004.

4) Increasing the Building and Scholarship endowments.

5) Increasing the line of credit available to the school from $1.0 to $2.0 million.

6) Need to create an general endowment. Saint Vladimir's has net asset levels comparable to Hellenic College/Holy Cross and they provide their students (on average) a 75 percent discount. However, nearly 45 percent of their endowment is unrestricted. This decreases their dependency on outside loans. As theological schools grow and expand, they tend to offer students more part-time, structured academics at lower discounts and have less of a dependency on unrestricted gifts and donations. However, until the school gains mass, it will continue to rely heavily on outside gift and donation income to support its operations.

Fr. Triantafilou attached to his letter a list of the names of the leaders of the school which read as follows: Rev. Emmanuel Clapsis, Dean Holy Cross; Lily Makrakis, Dean Hellenic College; James Karloutsos, Chief Operating Officer; Charles Kroll, Chief Financial Officer; Joan Pohas, Vice President of Institutional Advancement.

Prior to Fr. Triantafilou's letter, George Chryssis, Vice Chairman of the Board of Trustees, sent a letter dated April 29, 2003, to its members asking them to raise $500,000 by June 15 "to meet our budgetary responsibilities. As trustees, we have the responsibility to assist Hellenic College and Holy Cross in its fundraising efforts."

"It is our earnest request that each trustee commits to either personally gift or raise $15,000 for the school to help us meet our current financial challenge." Chryssis was appointed to the vice chairmanship by Archbishop Demetrios, succeeding George Behrakis, who resigned after six and a half years of service.

Sources told the Herald that the financial difficulties at Holy Cross are due in part to the large numbers of employees appointed by Fr. Triantafilou whose high salaries and benefits reflect "a mentality of nepotism and groomsmen," as a high ranking ecclesiastical official told the Herald.

To serve an average student body of 175, the school employs 76 full-time employees and some on a part-time basis. A prominent official of the Church who wishes to remain anonymous for now told the Herald, "If even 20 employees were dismissed tomorrow, the school could function easily."

The Herald has learned that James Karloutsos' (Fr. Alexander Karloutsos brother) appointment by Fr. Triantafilou as Chief Operations Officer created some sort of reaction. Sources in the school say that since Fr. Triantafilou is almost invisible at the school due to extensive traveling for alleged fundraising purposes, Fr. Karloutsos has become in effect "president" of the school.

The Herald has also learned that plans are underway to further expand Hellenic College, adding departments of Business Administration, Leadership and Computing. Aiming of raising $100 million dollars for the expansion and operations of school, Fr. Triantafilou appointed Joan Pohas to raise the money, a good part of which will derive from the Greek American Community.

Archbishop Demetrios has been informed in detail about the financial situation at the school, while every effort has been made to prevent leaks to the press.