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Submitted by the Bond & Botes Law Offices - Friday, May 15, 2015
Corinthian Colleges, Inc., founded in 1995, filed a petition under Chapter 11 (Business Reorganization) of the United States Bankruptcy Code in Wilmington, Delaware on May 4, 2015. Corinthian Colleges, Inc. is best known as a post-secondary education company with subsidiaries that offer vocational and career oriented degree and diploma programs. It has operated daily under the campus names of Everest, Heald and WyoTech. The company closed all campuses effective April 27, 2015.The Company listed $143.1 million in debt and only $19.2 million in assets.
The company’s woes began last year when the Department of Education levied a $30 million fine against it after alleging that Corinthian had shown “blatant disregard” for the federal student loan program. This followed the company being sued by the Federal Consumer Financial Protection Bureau (CFPB) for accusations that Corinthian and its subsidiary schools mislead students and accreditation agencies about its graduate employment rates. The $30 million dollar fine it owes to the Department of Education (DOE) remained unpaid at the time of the Bankruptcy filing and it is not known if the DOE will ever be paid.
There is good news for students enrolled at the time of the campus closings who are unable to complete their studies. If the student chooses not to transfer any of their Corinthian credits to a new school, they are eligible to have their federal student loan debts cancelled.
Corinthian is blaming federal and state regulators for its demise citing the “aggressive enforcement actions” against it. According to a Department of Education spokesperson, these actions were taken to protect students who have been hurt by any fraudulent action.
The abrupt closure affected not only a large number of current students, but also 2700 employees who all lost their jobs.
The actions of big corporations can trickle down to affect many on a daily basis. Companies like this close and file bankruptcy leaving their employees with a loss of how to handle their own finances. If you have been left in a similar situation or are experiencing any problems managing your financial situation, please contact our office nearest you to schedule a confidential and free consultation regarding your financial situation.
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