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For-Profit Chain’s Bankruptcy Grinds to an End

For-Profit Chain’s Bankruptcy Grinds to an End

Inside Higher Ed

Emma Whitford
December 10, 2020
The bankruptcy case began in 2014 after Anthem parent FCC Holdings Inc. was accused of predrawing federal financial aid dollars based on unsubstantiated enrollment projections.
A former for-profit college operator settled with the U.S. Department of Education for $8 million as part of the company’s bankruptcy case, attorneys announced last week. The settlement is the final step in a years-long case that began after FCC Holdings Inc. was accused of predrawing federal financial aid dollars based on enrollment projections that never materialized.
FCC Holdings used to operate 41 for-profit colleges under names including Florida Career Colleges and Anthem Education. It sold several of those colleges to another owner that continues to operate them. FCC Holdings closed other campuses when it filed for bankruptcy protection in 2014.
The newly announced $8 million settlement is much smaller than an initial $37 million claim from the U.S. Department of Education. The department’s primary concern was that FCC Holdings pay back all of the money its colleges had received in Pell Grants for the 2013-14 academic year — about $32 million, said Avery Samet. Samet is an attorney for the law firm Amini LLC and part of the legal team that represented Clingman & Hanger Management Associates during the legal proceedings. Clingman & Hanger is the liquidating trustee for FCC Holdings — a group appointed by creditors to liquidate the company as part of the bankruptcy proceedings.
But the colleges did enroll some Pell Grant-eligible students, and to return all of the Pell Grant money would be unfair, Samet said.
“To pay the government back 100 percent all of the Pell Grants would give the government a windfall against all of the other creditors in the case, because the school really did operate and really did have these students,” he said.

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