We had a similar problem in Ohio, though no one ever went so far as to order the schools closed. Ironically, part of the problem here was local funding: some districts have industry or higher property values and easily support themselves.
One of the little towns downstate filed a suit, and some little podunk judge decided to make a name for himself beyond chicken-rustling cases by ruling the system "unconstitutional". Inexplicably, the state Supreme Court refused to overrule him, putting this guy whose probably never gotten more than 300 votes in his life in de facto charge of the funding mechanism.
Apparently it never occurred to the state legislature to simply amend the state Constitution to make the long time existing sytem "constitutional".
-Eric
Here in New York, upstate "rotten boroughs" with small student populations have received a disproportionate amount of state aid relative to downstate, which has most of the people. We have had judicial decision after judicial decision attempt to remedy this. Of course, the additional tax dollars shifted to NYC schools hasn't exactly improved the schools. You can't make filet mignon out of Spam just by "dressing it up."