New Hearing Set on Edutrain School : Courts: Judge refuses to release operating funds for last two months but orders L.A. Unified to justify rescinding facility’s contract.

In the first court hearing over the bid to keep Edutrain Charter School open, a Superior Court judge said Friday that the Los Angeles Unified School District must prove it had reason to rescind the independent school’s contract earlier this month.

However, Judge Robert O’Brien did not order the district to release the more than $125,000 that Edutrain administrators say they are owed for operating the Downtown school for dropouts in October and November. Instead, O’Brien set a hearing for Jan. 13.

The district board canceled Edutrain’s year-old charter contract Dec. 5, citing concerns about flawed accounting and roll-keeping procedures and about $1 million in debt.

But the educators and executives who govern the school vowed to keep Edutrain open while they fought the decision in court on the grounds that the district knew they were working to solve those problems.

The school and the school district described the court ruling as a partial victory.

“It’s most of the enchilada,� said Artis C. Grant, an attorney representing Edutrain. “I’m fairly pleased.�

Rich Mason, general counsel for the school district, said he had anticipated that the judge would set a hearing and was glad that O’Brien did not release the requested emergency funding.

Financial support for the school was withheld for October and November while the district reviewed Edutrain’s financial history and prospects for survival, Mason said. Providing additional funding now could “put the district in the position where we might not be able to get the money back,� he said.

Court papers indicate that as of today, Edutrain owes immediate bills of $70,000 for payroll and outstanding debts, but has only $7,000 in the bank.