Less than a week after the Ontario Education Ministry closed 14 Everest College campuses in the province, the Canadian subsidiary of for-profit college operator Corinthian Colleges Inc. announced it had filed for bankruptcy.
The Wall Street Journal reports that Everest Colleges Canada Inc. filed for an assignment under the country’s Bankruptcy Insolvency Act.
According to an announcement from the subsidiary, the filing was necessitated by the closure of the 14 Everest campuses in Ontario last week.
“We are extremely disappointed that the Ministry has taken these abrupt actions,” Jack Massimino, chairman and CEO of Corinthian, said in a statement. “Our Canadian subsidiary had been working with the Ministry for an extended period of time with the goal of achieving a satisfactory outcome for students, employees and other stakeholders in Canada.”
The company says the bankruptcy filing has no impact on Corinthian operations in the U.S.
Troubled for-profit chain CCI – the operator of Everest University, WyoTech and Heald College in the U.S. – received news last week that its relatively unscathed Canadian campuses would be closed following a decision by an independent superintendent appointed under the country’s Private Career Colleges Act.
Training, Colleges and University Minister Reza Moridi told the Toronto Star at the time of the announcement that the decision was made in the best interest of the 2,450 students enrolled at the schools.
“Taking action now will give students the choice to either access transitional funding to complete their training at another location, or apply for a refund,” he said.
Under the Private Career Colleges Act of 2005 a $3 million liability fund has been set up to pay for training completion or refunds for Everest students enrolled in approved vocational programs.
California-based CCI has been facing a prolonged downfall in the U.S. since agreeing last summer to sell or close a majority of its campuses in a deal with the Department of Education.
Also last week, the company was delisted from Nasdaq and the California Student Aid Commission announced it would halt grants to CCI students. Both moves came after the company failed to submit required financial statements to both the Securities and Exchange Commission and the student aid commission.
The company, which is at the center of numerous federal and state investigations and lawsuits regarding allegations of bogus job-placement statistics, grade manipulation, questionable marketing practices, recently completed a $24 million sale of 56 campuses to Education Credit Management Corporation.
Corinthian’s Canadian Subsidiary Files for Bankruptcy [The Wall Street Journal]