More battles appear likely for Tarek ibn Ziyad Academy (TiZA), despite a vote by its board to not appeal a state decision that forced the charter school's closure.

TiZA's board decided Tuesday night that it will proceed with closure and dissolution in bankruptcy court. At a hearing Wednesday morning, however, the school's bankruptcy attorney told a judge that, while the board agreed to cease operations as a Minnesota charter school, TiZA is still "considering other options."

The position surprised many in the Minneapolis courtroom of U.S. Bankruptcy Judge Robert Kressel. "I'm not sure what the other options are," Kressel said, pressing for a clearer indication of TiZA's plans.

TiZA attorney Mark Kalla said the school's assets may be liquidated, but also said "I suppose [TiZA] could conceivably continue to operate as some type of school."

Three key potential creditors -- the state Education Commissioner, former authorizer Islamic Relief USA and the American Civil Liberties Union of Minnesota -- have called for a trustee to oversee TiZA's assets. They have cited "fraud and dishonesty" by the school and raised concerns that money will be funneled to Islamic groups and participants in the school's operations.

TiZA attorney Mark Azman said Wednesday that the school doesn't see the need for a trustee.

ACLU attorney Peter Lancaster said after the hearing that the group is concerned "about any effort to use public money to set up a private Islamic school."

Islamic Relief and the state have both been mired in a lawsuit brought against TiZA by the ACLU, which claims that the public school illegally promoted Islam. The education commissioner and Islamic Relief are both seeking recovery of legal costs from the school, and the ACLU has said it could be entitled to attorneys' fees if it proves its claims.

Attorneys for the trio of creditors also want to know why TiZA hasn't amended an initial bankruptcy petition that listed no assets, even though they said the school had reported more than $3.2 million in net assets on an audited financial statement a year ago. Kalla said the school does have assets, including several hundred thousand dollars in cash, and that court filings will be updated.

The state, the ACLU and Islamic Relief have expressed concern that TiZA has been planning to illegally spend assets at the expense of legitimate creditors, but the school and its adversaries on Wednesday agreed that TiZA will not make any payments without the court's approval or a stipulation of the parties.

TiZA filed for bankruptcy June 30, the day before a new state law disqualified Islamic Relief from overseeing the school, forcing TiZA's shutdown, and just hours after the state denied a request for the school to switch authorizers.

School director Asad Zaman said that TiZA filed for Chapter 11 bankruptcy -- typically used by reorganizing debtors -- in an attempt to "preserve the status quo" while the school considered its options.

Sarah Lemagie • 952-882-9016