A North London Orthodox boys’ grammar school is staying open despite the company that runs it having gone into voluntary liquidation.

Menorah Grammar School Limited has debts of £322,000 and only £1,200 in the bank, according to a report of a creditors’ meeting on January 16. A new set of governors has to be appointed and their first job will be to raise finance to pay staff salaries and reduce the debt, according to a former senior figure at the school.

Under a section headed “Reasons for failure”, the report noted that the recession had a “significant impact” on parents’ ability to pay the fees on which the company relied for most of its income. Donors had also been affected by the credit crunch and mention was additionally made of the death of benefactor and school director Benzion Dunner in a car accident last year. The increasing costs of running the operation had forced the directors to place it in voluntary liquidation.

The Edgware school was founded as a charity in 1978. It changed status to a limited company in 2002 so that trustees would not personally be liable for debts. The 150-pupil school is mortgage-free as it owns the building and the land on which it stands. It also houses the Menorah Foundation Primary, which is unaffected by the financial problems.

Ofsted reported last year that standards were good in every department.