The International School of Sophia Antipolis near Nice - a rare example of an international school with boarding places that puts pupils through the International Baccalaureate - owes 2 million euros (pound;1.4m) including rent and catering fees.
A French court has appointed an administrator to take over the financial running of the school to allow the graduating class to complete its IB next month.
Jarek Garlinsky, an experienced international school head, came out of retirement in January to run Sophia Antipolis. "If I had known the true state of the finances I would not have come," he said. "It is an absolute tragedy. I look into the eyes of the students and see total incomprehension. How could it have happened to us, they ask."
The staff were told in February that there was no money to pay them beyond mid-April and that the school had not been paying into their health insurance and retirement funds as legally required.
The school opened more than 25 years ago and has a strong academic reputation. It serves the Sophia Antipolis area, known for its technology park which employs 25,000 high-technology workers.
Because it offers boarding, it also attracts families from much further afield, including British families fleeing much higher fees at UK boarding schools.
Pupils have been leaving but those about to sit IB exams in May have to stay put - taught in makeshift classrooms by teachers uncertain of their own future. The British staff have said they will guarantee teaching for the IB group. "We are committed to the students," said teacher Nick Frances.
Although France has a good unemployment safety net, paying some 80 per cent of salary for six months, parents are setting up a fund to help teachers with loans if required.
But Mark Ballantyne, 57, who taught at the school for more than a decade, said he had few options. "My career is over, I'm compost."