McCartney's troubles must have seemed so far away when he opened the institute earlier this year as Britain's first "Fame" school for young performers.
Now he needs a place to hide away - he has gone on holiday - and think about the financial crisis.
Mark Featherstone-Witty, the LIPA chief executive, is sorting out the mess after renovation costs spiralled for the building, which was once the grammar school attended by McCartney.
"It's irritating having this shadow hanging over us, because it is going astonishingly well," he said. "The fact is that we are educators. We do not restore Grade II listed buildings and we relied on others to make those sorts of decisions for us.
"Somehow this whole thing was not managed in the way it should have been and we went drastically over budget."
The cash crisis is the result of a building scheme which cost Pounds 15. 5 million, Pounds 5 million more than the original estimate.
LIPA is considering legal action against project managers, surveyors, engineers and others involved in converting the 1825 building.
It has taken out loans to cover Pounds 3 million of the shortfall and is seeking new sponsors for the rest.