Even if you loathe the idea of therapeutic programs, the sudden Chapter 7 means that three weeks' wages for the 310 CEDU employees go into the larger bankruptcy pool -- meaning they are stiffed. I wonder how much that is...let's say each of the 310 are earning $50,000 per year (not likely, as many have only high school diplomas and so on) $50,000 divided by 52, times 3, time 310 = $894,231.00 (mol)
Wonder what a real man would do?
The mensch of Malden Mills Aaron Feuerstein, paid out $24 million. And reorganized itself out of bankruptcy.
The leader of the organization that lead CEDU into abrupt closure says he believes that business must adopt a new tradition of responsibility .
Sure is easy to say.
CEDU schools seeking bankrupty protection
Posted: Tuesday, Mar 29, 2005 - 08:38:35 am PST
By LUCY DUKES
Hagadone News Network
BONNERS FERRY -- A skeleton crew was closing down operations at CEDU schools Monday, hoping they'd get paid even though the company filed for Chapter 7 bankruptcy in Delaware on Friday at 9 p.m. EST.
Less than 24 hours after the bankruptcy filing, the 301 students were gone and by Monday morning, Bonners Ferry Idaho Commerce and Labor office staff saw more people in 90 minutes than they normally see in a day.
As Commerce and Labor staff braced for a potential jump in unemployment -- up to 12.7 percent next month compared to February's 6.5 percent -- and tried to figure out how to cope with more people looking for work than available jobs, rumors circulated about a group of parents wanting to buy the schools. A meeting to discuss a possible purchase was scheduled Monday night, said Northwest Academy Director Peggy McCalmant, but the outcome was unknown at deadline.
Experts are scrambling to find out what caused the largest and most abrupt closure ever seen in the industry, while schools and organizations for troubled teens poured out support for parents of CEDU students and the youth whose treatment had been interrupted by the closure, and national and local news media queued up to ask George McCown and Jeff Zawadsky of McCown and De Leeuw and Co. -- the investment firm that owns CEDU -- what led to the financial difficulties that caused the closure.
McCown and Zawadsky did not immediately return phone calls to the Hagadone News Network. CEDU communications director Julia Andrick said she'd given their number to the Wall Street Journal and Forbes, among others, and office staff for the investment firm said the two had been in conference calls all day.
CEDU's bankruptcy trustee, George Miller, could not be reached for comment Monday. He was scheduled to be in court all day, according to his voicemail, and his voicemail box was full. CEDU announced the closures on Friday, shocking 301 students, their parents, 250 employees and the community.
CEDU had operated Ascent, Northwest Academy, Boulder Creek Academy and Milestones in Idaho. Milestones is in Coeur d'Alene, and the other schools are located in Boundary County. CEDU has a small office in Sandpoint and closed Rocky Mountain Academy in mid-February, saying it could no longer attract quality staff and therefore could not attract students.
The employees were told on Thursday that CEDU could not meet payroll on Friday. They were not paid for three weeks of work already done, and the wages are included in the bankruptcy filing, said Dave Darrow, Bonners Ferry Idaho Commerce and Labor office manager.
He heard about the closure at 5 p.m. on Friday -- just a few hours after the schools' employees heard the news. Federal law requires workers be given 60 days notice of layoffs under certain conditions. When Darrow informed CEDU officials, he was told that CEDU decision-makers already knew.
His staff had seen 75 former CEDU employees by just after noon on Monday, while they ordinarily help 25-30 people in the course of an ordinarily busy day, Darrow said. Another 50 employees were seen at the Sandpoint office. "They were here as soon as we opened the doors," he said.
Sandpoint and Bonners Ferry staff are forming a team to help with retraining, but now, they're trying to get people processed for unemployment About 130 of those employed at CEDU live in Boundary County, 103 live in Bonner County and the rest live in Kootenai County, Washington and Montana, said Darrow.
Schools from out of the area called in with jobs for CEDU hopefuls, but none of the jobs are local, said Darrow. Many of those who lost their jobs are married to people who also work at CEDU, he said. "Not only are you seeing one income, impacted, but both incomes," he added.
He doesn't have specifics on the education of staff, but the counselors and teachers were not necessarily certified and don't necessarily have degrees. Some of the positions were filled by people who had been promoted from within and don't have degrees. "That will be an obstacle in seeking other employment," said Darrow
Meanwhile, experts tried to figure out what had happened.
Enrollment was good, as was reputation, said Lon Woodbury, editor and publisher of Woodbury Reports, which publishes Struggling Teens, an online resource for parents of troubled youth. According to his Web site, Woodbury has worked for 17 years in the industry. He has heard that CEDU was unable to service its debt.
Woodbury is also coordinating a massive outreach to parents and students of CEDU schools. More than 30 educational consultants, schools and organizations have responded, many offering pro bono services, reduced rates, waived enrollment or registration fees and priority placement.
The closures are not an industry trend, said Jan Moss, director of the National Association of Therapeutic Schools and Programs, a networking and professional association for the industry. About 130 schools and organizations are part of the association. The industry has actually grown, she said.
At the schools themselves, halls were empty while a handful of staff organized student files and cleaned up while the bankruptcy trustee petitioned for the crew to be paid for two weeks.
McCalmant didn't know if she'd get paid for her work. She stayed for an early graduation ceremony on Saturday for Northwest Academy students scheduled to graduate in May. McCalmant called the ceremony "beautiful."
She was in her office on Monday, not sure of her status, overseeing the closure and watching a few guitars and duffle bags, and hoping for answers. "Most of the people here today hope they will get some compensation for this," she said.
This is a relationship-based program, and they closed this like it was a factory," a counselor at one of the schools told the Spokesman-Review newspaper in Spokane, Wash.
Brown Schools operate 11 boarding schools and educational facilities in Idaho, Texas, Vermont, Florida and California, according to its Web site. Facilities in Austin and San Marcos were sold to Psychiatric Solutions Inc. in 2003.
- Former CEDU Schools Reborn January 5 2007
- Update on CEDU Schools October 28 2005
- CEDU Properties Sold August 18 2005
- The Business of Troubled Teens August 18 2005
- CEDU Closing: Buildings and Contents to be Sold May 8 2005
- CEDU Closing: On Edison Schools April 30 2005
- CEDU Closing: Pete Talbott's Resume April 27 2005
- CEDU Closing: McCown DeLeeuw Sued ByEmployees April 14 2005
- CEDU Closing: George Locker's Criticism of the CEDU Enterprise April 14 2005
- CEDU Closing: 1990 Snapshot of McCown DeLeeuw April 12 2005
- CEDU Closing: A Timeline of the CEDU Enterprise April 2005
- CEDU Closing: Letter from a Former Faculty Member April 2005
- CEDU Closing: Parents of CEDU Students Helping Economically Distressed Faculty April 7 2001
- CEDU Closing: Economic Impact on CEDU Employees Devastating April 7 2005
- CEDU Closing: 310 Employees Stiffed on Wages April 6 2005
- CEDU Closing: Who is To Blame? April 6 2005
- CEDU Closing: Running Springs Area Also Suffers Financial Impact April 6 2005
- CEDU Closing: An Alumnus Pleads, "Save CEDU!" April 4 2005
- CEDU Closing: A Parent's Response to CEDU's Closing April 3 2005
- CEDU Closing: Bankruptcy Trustee Slams Door Shut, Then Open April 3 2005
- CEDU Closing: Parents Out Prepaid Tuition, Employees Lose Retirement. McCown Deleeuw Still Solvent April 3 2005
- CEDU Closing: King George Stays Open as Head Thinks on Feet April 3 2005
- CEDU Closing Shocks Industry Reporter April 3 2005
- CEDU Closing: Parent Company, Brown, Negotiating in Bad Faith? April 1 2005
- CEDU Closing: More Details March 29 2005
- CEDU Closing: Brown Schools, CEDU's Parent, Files for Bankruptcy March 29 2005
- CEDU Closing: Margurite Sallee, The Brown Schools, and McCown DeLeeuw March 27 2005
- CEDU Closing: All CEDU Schools Closing Immediately March 25 2005
- CEDU Closing: Rocky Mountain Academy Folds Abruptly February 12 2005
- Debunking "Tough Love" Programs April 11 2006
- Advice for Parents Seeking a Therapeutic Program for Their Children January 21, 2006
- Why The "Troubled Teen" Industry is Booming January 2, 2006
- The Road To Whatever August 25 2005
- Nonpublic School Governance April 23 2005
- Why Parents Seek and Pay for Therapeutic Boarding Schools April 14 2005
- NYT Article on the Therapeutic School Industry April 13 2005
- Therapeutic Schools: What Happens to Poor Kids April 10 2005
- Thinking of Sending Your Kid to A "Tough Love" Program? March 30 2005
Questions Parents Should Consider Before Placing A Child
- NonPublic Schools: Part I--Overview
- NonPublic Schools--Part II Evaluating Mission, Values, & Goodness of Fit for Your Child
- NonPublic Schools--Part III Faculty and Staff Qualifications
- NonPublic Schools--Part IV: Evaluating Academic Program
- NonPublic Schools:Part V--On Accreditation
- NonPublic Schools:Part VI--More Detail on Financial Issues: IRS Status