"It's an outrageous thing to happen without any planning," one parent said. "The way they did it showed very little concern for the students and their parents," Harvey Baumol said.
It looks like what happened is that McCown De Leeuw, the big investor in Brown Schools, which owns CEDU schools, got tired of the CEDU schools losing money. They must have been a cash cow at some point for MDC to have invested....
On March 21, 2005, Fenton "Pete" Talbott was named CEO of the Brown Schools . Talbott's a finance guy, and came over from McCown De Leeuw--he has zero school experience. Talbott replaced Bob Naples (2003-2005) who replaced Marguerite Sallee, who...
CEDU was stand-alone from 1967 (when it was founded by Mel Wasserstein), until 1998, when The Brown Schools bought a controlling interest in CEDU. At some point prior to September 2001, the Brown Schools sold equity to McCown De Leeuw, which became The Brown Schools' largest investor (i.e., called the shots). In 2001, George McCown became the Chairman of Brown Schools.
The first sign of trouble was when Rocky Mountain Academy closed abruptly Feb. 10, 2005.
Boarding School Announces Immediate Closure --Employees of a Idaho boarding school are out of a job.
CEDU Educational Services couldn't make its payroll last week at a Bonners Ferry school. The company blamed a lack of financing. [What this means is that MDC cut off funding--ead]
Spokeswoman Julia Andrick says about 301 students -- mostly from out of state -- will be sent home. And Kathryn Tacke with Idaho Commerce and Labor says about 260 higher-wage jobs will be lost.
The organization, started as a charity by a Palm Springs, Calif. businessman Mel Wasserman, runs boarding schools and wilderness programs for troubled kids.
That's the problem with for-profit schools -- they can slam shut with no recourse. CEDU was employing 300-400 people in Bonners Ferry. In 2004, two of the CEDU entities swapped locations. That didn't work and Rocky Mountain Academy closed in February 2005.
"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.
- News Articles On Cedu Closing
- (republished as new information appears) Timeline of CEDU Closing a summary, link-heavy post in chronological order of CEDU history, from founding to the present time.
- April 14, 2005: Class Action Suit Filed Against McCown deLeeuw by Suddenly Jobless Faculty, Staff -- suit alleges violation of WARN Act.
- April 6, 2005: McCown deLeeuw spokesman and TIAA-CREF spokesman blame each other for the schools' sudden collapse. An outbreak of integrity does not ensue.
- April 6, 2005 What would a person of integrity do? More on the new tradition of responsibility from McCown deLeeuw: stiff the employees out of their paychecks.
- April 7, 2005: The CEDU closing is a catastrophe for employees and for the local economy.
- April 4, 2005 CEDU closing is also a California economic disaster -- CEDU owes local small businesses thousands.
- Interview with Paul Johnson, CEDU : Why did The Brown Schools board, and their masters, MDC, treat us this way? (MDC had not made 401K contributions, part of the staff compensation package, for 3 months.)
- April 3, 2005 King George's Head doesn't close school, has parents who are helping.
- April 3, 2005 Employees out Paychecks, Parents Out Tuition, but McCown deLeeuw Still Solvent. I can't decide which is more outrageous, the parents who were billed for tuition, who won't be reimbursed, or the employees, who were robbed of three weeks' pay.
- April 3, 2005 TIAA comes through with funding -- too late. The primary creditor supplies a bridge loan, but it's too late: most of the kids have left, are finding other programs.
- March 29, 2005 More on CEDU closing text of articles from the Bonners Ferry local papers, outlining the hardship on students' families and on faculty, staff, and the ecoonomies arouond the schools.
- March 27, 2005:CEDU Is Closing --my first article on CEDU closing.
- March 27, 2005 Austin Statesman article on Brown Schools bankruptcy filing. Link to actual filing, which has details.
- February 12, 2005: Rocky Mountain Academy Folds
- Commentary
- April 6,
- April 5, 2005 Save CEDU! an alumnus declares it should be saved.
- April 4, 2005 A Parent Contrasts the Caring of CEDU and the Heartlessness of its owners, MDC
- April 12, 2005 A Faculty Member Reflects on her experience at CEDU and the meaning of the closing.
- CEDU Closing Shocks One Industry Expert (I've also heard from others who are equally shocked and outraged by MDC's decision and lack of care for the clients and families.)
- Other Articles on Therapeutic Boarding Schools and Treatment Programs
- The Lure of Treating Kids Roughly to "Improve" Their Behavior (April 15, 2005)
- Why Parents Seek Therapeutic Boarding Schools Newspaper Article: Therapeutic education industry booms as parents seek help for kids. (Published in the Chicago Tribune 1/20/2004-- by Bonnie Miller Rubin) Background and History
- CEDU: Who are the principals -- the decision-makers in the wreck of an educational institution.
- 1990 Fortune Article mentioning McCown deLeeuw, mentioning that the firm believes in the "new paradigm" of bottom-up organization:
target well-positioned but underperforming businesses and restructure them to stress empowerment of employees, creativity, and openness.
- March 31, 2005: The Wall Street Journal surveys the "struggling teen" Industry -- a rather hurried job. One of the glossed-over questions is why are these facilities for-profit at all?
- March 27, 2005:Preliminary Notes on CEDU management -- I got confused about who was managing CEDU when, so this was a first go-round.
Financial troubles shut down CEDU schools
Posted: Saturday, Mar 26, 2005 - 08:59:01 am PST
By LUCY DUKES
Hagadone News NetworkBONNERS FERRY -- CEDU Education, a program for troubled teenagers, announced Friday it is closing all of its schools because of financial insolvency. The abrupt announcement came as a shock to 301 students, their parents, 250 employees in Boundary County and 40 in Bonner County, and the community.
No one realized the program was in such poor financial condition. Local officials called the job loss "devastating."
Teenage students enrolled in the program will be returned to their parents within the next 10 days. CEDU employees aren't sure when their last day at work will be. CEDU did not disclose the cause of the financial difficulties, saying it had been caused by "a number of factors."
"The students' safety and making this transition as easy as possible for them is our priority," said Pete Talbott, chief executive officer of CEDU. "I deeply regret that we have come to the end of CEDU's nearly 40-year history."
According to employees, they did not know CEDU was shutting the schools until Friday afternoon, although they had not received their paychecks for the week and knew there was a problem.
"None of us had been aware that it had gotten to this point, and it's incredibly disheartening, and the impact and ramifications to the students, the families, the community -- it's just hard to fathom," said communications director Julia Andrick. She was informed of the closure at 3 p.m. on Friday. "This was news to everybody -- senior management and employees -- this afternoon," Andrick said. She called the decision "heartbreaking."
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.
CEDU employed 500 people in all of its facilities, which were located in Idaho, California and Vermont.
The employees appeared distraught. Boulder Creek Academy English teacher Valerie Davis was in tears when she talked about the closure after she inquired about a job at the Bonners Ferry Herald Friday evening. She and her fiance, Boulder Creek Academy counselor Silas Thompson, just bought a new house in Bonners Ferry and hadn't made their first house payment. Davis worked for CEDU for nine years.
"I'm just sad because I love my school," said Davis, who isn't upset about finding a new job, but about losing the one she loved. She had just updated her resume because she was teaching resume writing in one of her life-skills classes. "I know that we'll be able to pull it together. I'm sad that I won't be working with the people that I work with. I'm sad to watch something that I helped build, something that I helped create. I'm sad to see it go away, because I'm proud of it," she said.
"I had the best boss that I ever had ... all the people that I worked with were just incredible." Talking about the students was upsetting for her as well. "It would be sad to see them all go, because some of them are really getting something really valuable," Davis said. "Working at BCA is like having a dream job. You go to work, you teach students that you can see grow quickly. They just come so far as they grow emotionally. Most of the time going to work was like playing," she said.
Some of the students Davis helped stay in contact with her, sending her pictures of their children. "Just watching them, tracking them as they become adults, has been great," she said.
CEDU employees aren't the only ones upset by the loss. Students will abruptly stop in the middle of the growth programs. "We've gotten a lot of really good things from these programs," said Harvey Baumoel of Ukiah, Calif. He and his wife, Theresa, heard about the closure at a 5 p.m. Friday ceremony for some of the parents and students. Harvey Baumoel said their son, 16-year-old Bryan Staber-Baumoel, has made tremendous progress at Boulder Creek Academy. The two were angered by the suddenness of the announcement.
"It's an outrageous thing to happen without any planning," Harvey Baumoel said.
Baumoel believed the suddenness of the closure and lack of "disengagement" plans belied CEDU's claim that helping students make the transition is a priority.
"The way they did it showed very little concern for the students and their parents," Baumoel said.
"I think that not only is it a major shock to me and to my wife and all of the parents that are involved in here. For whatever reasons, we don't know, nobody told us why this is happening, but the way this is happening is very unprofessional and inconsiderate and outrageous," he said.
He was also upset over the loss of a program that has helped his son immeasurably. "The staff has been incredible and wonderful in saving kids' lives literally in keeping them from going back in the direction that they were in," he said. "For them to close this down has been a major loss for those who need that and for parents."
"I looked at my son and said what are you going to do now," Baumoel said. Staber-Baumoel said he was shocked, and that the school "meant a lot to a lot of kids," and helped them achieve what they wanted from life. Boulder Creek Academy helped him. "I've gotten over a lot of problems that I had, like honesty, like having integrity ... it kind of gets you back on track. It puts you in a place where you have to look at a lot of things," he said. "It helped a lot of kids regain control over their lives," he said.
The schools have also helped the community maintain economic footing. CEDU is one of the largest private employers in Boundary County, said Kathryn Tacke, regional labor economist with the Idaho Department of Commerce and Labor.
Idaho Commerce and Labor will assist with finding new jobs, retraining and relocation when necessary, she said, but the community faces difficulties. The kinds of jobs lost -- numerous counseling and teaching jobs -- are not usually the kind concentrated in one place.
Tacke also found the news of closure unexpected. "There didn't seem to be any forewarnings that there were any problems at all until Rocky Mountain Academy closed down," she said.
The loss didn't look like it would affect anything but RMA, Tacke added. "My greatest hope of course is that somebody would buy the schools and maybe restore the jobs," she said.
Local officials were also surprised, and they were enormously concerned about those who lost their jobs, their families, the students and the ripple effect of so many jobs lost in an area that only two years ago lost 150 jobs when the Louisiana-Pacific Mill in downtown Bonners Ferry closed.
"I don't know how they're going to recover from that. There's just not enough jobs to go around," said Boundary County Commission Chairman Ron Smith. He worked for CEDU for a few months after serving as Boundary County sheriff in the 1980s helping relocate students if they left the schools.
"There's going to be a lot of praying, a lot of prayers. Everyone should be praying for these guys," Smith said.
"The community's really going to have to stick together now."
County officials had no warning that CEDU was in such dire financial condition, he said. "I wish they could have got with the county to see if there's anything that we could have done. That's devastating to the community," said Smith. "We're going to lose 250 jobs. That's worse than when we lost the mill," he said.
Bonners Ferry Mayor Darrell Kerby was also worried for employees and their families. "It's been an institution around here for a long time, providing many years of employment," he said. "It'll be a sad spring for many families that have relied on that institution to provide them with employment."
==============
By Mike Weland
More than 250 Boundary County residents learned Thursday that they were without a job as CEDU Schools, which operates Northwest Academy and Boulder Creek Academy in Boundary County, announced suddenly and with little fanfare it was ceasing all operations immediately after failing to meet payroll.
In addition to losing their jobs, several employees have yet to be paid for the last two-week pay period.
In addition to schools in Boundary County, CEDU also operates campuses in Bonner and Kootenai Counties and those campuses were also shut down, along with campuses in California and Vermont.
According to sources who requested to remain anonymous, the shutdown impacts about 500 employees nation wide and about 300 students.
As of Saturday morning, the CEDU website bore no news of the closure.
Founded in 1967 as a family-operated emotional growth program catering to mostly wealthy families who paid up to $5,700 per month in tuition, the schools were recently purchased by an investment firm. Early last month, the program’s flagship in North Idaho, Rocky Mountain Academy, was closed soon after being re-located to the former Northwest Academy campus near Naples due to dwindling enrollment.
On Thursday, the firm held a meeting for parents and staff in Coeur d’Alene, where they announced their insolvency and said it could see no means by which to keep the program running. Work is underway to return remaining students to their homes, mostly out of state, and the company that now owns CEDU Schools has set Monday as the deadline.
Many of the students were able to return home immediately, as many of their parents were in North Idaho when the announcement was made, ostensibly to attend teacher/parent conferences.
The shutdown comes in the wake of a lawsuit that was settled for $300,000 in 2002 after the parents of two Rocky Mountain Academy students filed civil suit against CEDU alleging that their children had been abused.
Also known as the Brown Schools after their founder, CEDU schools have been a major private employer in Boundary County for nearly 30 years, and the sudden shutdown will have significant adverse economic impact on Boundary County, and will force many of the families who derived their incomes from the schools to leave the community in search of work.
===================
CEDU also shuts down in California, at the Running Springs schools
Private school closes
Cedu says it's broke, sends students homeRUNNING SPRINGS - The large wooden sign hanging outside Cedu School greets all who enter the pristine 75-acre property with the optimistic words "To Dream the Impossible Dream.'
Whatever dreams those affiliated with the school may have had, however, were put on hold when they got news last week that the school was shutting down after 38 years due to bankruptcy.
"It was a surprise to all of us that we are closing the school down and sending the children home,' Cedu spokeswoman Julia Andrick said Saturday in a telephone interview.
She said the company filed for federal Chapter 7 bankruptcy on Friday, then notified its staff and students at its seven campuses across the country of the campus closures at 3 p.m. "Everything's up for sale right now,' Andrick said.
Company Chief Executive Officer Pete Talbott said in a statement the 301 students from the school's seven campuses should be home with their parents in the next 10 days. About 500 employees will be left unemployed.
A flier posted in the Running Springs school's front office window Saturday stated that other schools were trying to find work for Cedu employees, and that a relief fund had been established by parents for employees.
"I deeply regret that we have come to the end of Cedu's nearly 40-year history,' Talbott said.
The company has become so void of funds that it wasn't even able to give employees their final paychecks on Friday. It was unclear if they would receive future compensation.
A stack of memos sat atop the front desk in Cedu's front office Saturday in Running Springs while employees gathered up their belongings and said their goodbyes.
The memos notified employees they would be receiving a claim form in the mail so they could file for compensation of three weeks pay and any accrued overtime, provided the funds are available.
Cedu Middle School counselors Munir Jones, 54, and Skip Borg, 53, loaded personal items into the bed of a pickup outside the campus "It's very sad and a disbelief,' said Jones, of Lake Arrowhead.
He said that for him, seeing the sadness on the students' faces when they were told they were going home was the worst, "This is probably the only place they were safe and had relationships, with adults and with children,' Borg said.
School founder Mel Wasserman opened the middle and high school campuses in Running Springs in 1967. Since then, five other campuses opened up nationwide four in Idaho and one in Vermont.
Despite the many parents who have praised the expensive boarding school for bringing out the best in troubled teens, the Running Springs campus has had its share of problems.
The father of a 14-year-old girl sued the school in September, accusing it of blocking communication between him and his daughter while she was a student at the school between August 2003 and January 2004.
In June, sheriff's detectives searched the school after a girl reported that two 18-year-old students raped her repeatedly on campus in September 2001, just weeks after she enrolled. She was 15 at the time.
The sheriff's Twin Peaks station received an average of 30 calls monthly from the school reporting runaway students. Most of them returned, except for one.On Feb. 8, 2004, Daniel Yuen, 16, of Edison, N.J., ran away from the school after his second week of attendance. He remained missing Saturday.
The Brown Schools also provided services for Texas and Florida:
Alternative Education Programs
Our alternative education programs are provided in partnership with local school districts and juvenile justice agencies. At risk students are given an opportunity to be educated in an alternative setting with highly skilled academicians in smaller, controlled classrooms. Services are provided for adolescents with special education needs, and GED preparation is available for older students.
Dallas County Juvenile Justice Charter Schools
Dallas, Texas
Excel Academy
Houston, Texas
Harris County Juvenile Justice Charter Schools
Houston, Texas
Kingsbury and NI'KE Academy
Ocala, Florida
===============
- News Articles On Cedu Closing
- (republished as new information appears) Timeline of CEDU Closing a summary, link-heavy post in chronological order of CEDU history, from founding to the present time.
- April 14, 2005: Class Action Suit Filed Against McCown deLeeuw by Suddenly Jobless Faculty, Staff -- suit alleges violation of WARN Act.
- April 6, 2005: McCown deLeeuw spokesman and TIAA-CREF spokesman blame each other for the schools' sudden collapse. An outbreak of integrity does not ensue.
- April 6, 2005 What would a person of integrity do? More on the new tradition of responsibility from McCown deLeeuw: stiff the employees out of their paychecks.
- April 7, 2005: The CEDU closing is a catastrophe for employees and for the local economy.
- April 4, 2005 CEDU closing is also a California economic disaster -- CEDU owes local small businesses thousands.
- Interview with Paul Johnson, CEDU : Why did The Brown Schools board, and their masters, MDC, treat us this way? (MDC had not made 401K contributions, part of the staff compensation package, for 3 months.)
- April 3, 2005 King George's Head doesn't close school, has parents who are helping.
- April 3, 2005 Employees out Paychecks, Parents Out Tuition, but McCown deLeeuw Still Solvent. I can't decide which is more outrageous, the parents who were billed for tuition, who won't be reimbursed, or the employees, who were robbed of three weeks' pay.
- April 3, 2005 TIAA comes through with funding -- too late. The primary creditor supplies a bridge loan, but it's too late: most of the kids have left, are finding other programs.
- March 29, 2005 More on CEDU closing text of articles from the Bonners Ferry local papers, outlining the hardship on students' families and on faculty, staff, and the ecoonomies arouond the schools.
- March 27, 2005:CEDU Is Closing --my first article on CEDU closing.
- March 27, 2005 Austin Statesman article on Brown Schools bankruptcy filing. Link to actual filing, which has details.
- February 12, 2005: Rocky Mountain Academy Folds
- Commentary
- April 6,
- April 5, 2005 Save CEDU! an alumnus declares it should be saved.
- April 4, 2005 A Parent Contrasts the Caring of CEDU and the Heartlessness of its owners, MDC
- April 12, 2005 A Faculty Member Reflects on her experience at CEDU and the meaning of the closing.
- CEDU Closing Shocks One Industry Expert (I've also heard from others who are equally shocked and outraged by MDC's decision and lack of care for the clients and families.)
- Other Articles on Therapeutic Boarding Schools and Treatment Programs
- The Lure of Treating Kids Roughly to "Improve" Their Behavior (April 15, 2005)
- Why Parents Seek Therapeutic Boarding Schools Newspaper Article: Therapeutic education industry booms as parents seek help for kids. (Published in the Chicago Tribune 1/20/2004-- by Bonnie Miller Rubin) Background and History
- CEDU: Who are the principals -- the decision-makers in the wreck of an educational institution.
- 1990 Fortune Article mentioning McCown deLeeuw, mentioning that the firm believes in the "new paradigm" of bottom-up organization:
target well-positioned but underperforming businesses and restructure them to stress empowerment of employees, creativity, and openness.
- March 31, 2005: The Wall Street Journal surveys the "struggling teen" Industry -- a rather hurried job. One of the glossed-over questions is why are these facilities for-profit at all?
- March 27, 2005:Preliminary Notes on CEDU management -- I got confused about who was managing CEDU when, so this was a first go-round.
Another list that may be identical to the list above, without commentary
- 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
Related Posts:
- 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
Pete Talbot was president of the Brown schools for the last week. He was asked to step in and replace the former president George E. McCown and negotiate in the final week.
The TIAA-CREF was the primary loan holder of Brown Schools. McCown DeLeeuw was the secondary loan holder. George McCown was head of Brown Schools.
Apparently the debt service to those two lenders was what ultimately drained the company of cash. Those two companies got 8 million dollars in interest payments. The result was that George and the TIAA-CREF guys drained the Brown schools of operating capital. In the final week Pete was asked to try and save the schools. The plan was to get a bridging loan of 2.2 million dollars from the two investment groups to extend the life of the schools, pay salaries and file chapter 11. Then they would begin deconstructing the Brown Schools to the various groups who were already expressing interest in buying the individual schools.
On Friday TIAA-CREF and McCown DeLeeuw announced there would be no loan agreement. Pete went to Herb Allison to beg for 500,000 dollars to meet payroll and extend into next week so they could work out a deal.
In the end, there is no loan and Pete was ordered to close CEDU and file for chaper 7.
Staff of the schools are not paid for the last two weeks' work, but they will ultimately get paid from the bankruptcy court. Meanwhile the court appointed trustee will pay employees who worked after 4:30 Friday.
Posted by: Anon | Tuesday, March 29, 2005 at 07:09 PM
Herb Allison is the CEO of TIAA-CREF.
TIA-CREF is the Teachers Insurance andAnnuity Association/College Retirement Equities Fund (TIA/CREF)
Posted by: Anon | Tuesday, March 29, 2005 at 07:26 PM
For those who are curious.
I am one of the 250 or so who lost their job on Friday in North Idaho.
None of the staff, or even the regional managers were aware that the financial problems at CEDU had reached such dire proportions until we did not receive our paychecks on Thurs (March2005)
We were told that a meeting of the upper management/financial backers would take place on Fri., and that an announcement would be made late in the day informing us of when we might receieve our checks.
I have since been told that the two primary investors in Brown Schools 1) George McGowan and his partner, Delough (sp?) and 2)a group called "Teachers" could not reach
1) George McCown and his investment group McCown deLeeuw
2) Teachers = Teachers Insurance andAnnuity Association/College Retirement Equities Fund (TIA/CREF)
could not reach agreement on a plan or price for a possible sale to other investors, and instead chose to immediately close the schools and have filed for Chapter 7 bankruptcy, which means all the schools' property and assets will be sold off to pay debts.
I am not sure if corporations or subsidiaries, such as CEDU, can file Chapter 7
The root of CEDU's financial problems as it has been explained to me goes back to the time 6-7 years ago when Brown Schools purchased it from Mel Wasserman.
Apparently just prior to the sale, the Wassermans made an effort to fill the schools up quickly (particularly Rocky Mountain Academy), and created an inflated picture of what CEDU's revenue producing capacity was, which resulted in Brown Schools paying way too much for CEDU.
They (Brown School's managememt team have tried numerous measures in the past few years to rectify this, but were unsuccessful.
This is particularly troublesome to those of us who currently worked there, as for the most part BCA, NWA, and Ascent were profitable in the context of their own budgets, but not in the context of paying off loans for the inflated price paid for them.
There are attempts being made by some staff, current parents, and ed consultants to reach out to alumni students and families or other investors to reorganize and create an ongoing program or programs, but it is likely that the window for this, at least on the current properties will be short.
Parents of current students have also been making donations to help the staff, who have not been paid a cent for the last 3 weeks work, and are unlikely to see much or any of the money as it is tied up in bankruptcy. Many have continued to come to work and help the kids and families get ready to move on.
As a relative newcomer to the CEDU system, I am sympathetic to those who had to endure some of the "old school" CEDU approach. Someone earlier posted about how the best staff and therapists were those that tried to create a bond with students and then appealed to their desire to create something better for themselves and their families. I couldn't agree more. While I'll acknowledge that there were vestiges of the "old school", while I was there I never saw anything that I considered abuse, and had I, I would have reported it to Child Protection.
I can understand those who may have been mistreated feeling a sense of relief or even some kind of vindictive joy at CEDU's closing. But I hope some can understand that there were many who worked there out of a sincere desire to help and care for kids, and not for money. I made a decent living at this, but not enough to, for example, send my child to a CEDU, let alone a regular boarding school. The loss of 250 jobs to the Bonners Ferry area will be a devastating blow to a community that doesn't have much to begin with.
Posted by: A CEDU Teacher | Tuesday, March 29, 2005 at 07:42 PM
One thing that tells you how the Brown schools operate. Most of the families are on credit card debit or bank account debit for tuition.
CEDU charged everyone March 24th for the month of April, knowing that they were going to shut down on March 25th and declare bankruptcy. In addition they immediately shut down the CEDU email system so all of the remaining staff (that is working free to try to make sure the kids get home) don't have email.
My daughter went there, but I pulled her out 3 months ago.
Posted by: A CEDU Parent | Tuesday, March 29, 2005 at 08:29 PM
I was a CEdu Middle School Graduate. I must say I am shocked to hear this. they were successful when I was there. I graduated on December 15, 2005. I have been fond of CEDU Middle School but I was never fond of the school they recomended to me for After CEDU, King George School in Sutton VT. I must Say that King George School waqs never very Successful in my two years there. But CEDU shocks me! I wounder what all of my friends who went there will think? Where will the Staff Go? I have a lot of friends who are staff there. I wish them the best of luck.
Matthew Kaufman
Posted by: Matthew Kaufman | Thursday, March 31, 2005 at 06:16 PM
I mean December 15, 2002! Sorry
Posted by: Matthew Kaufman | Thursday, March 31, 2005 at 08:19 PM
I was very saddened to hear that the CEDU schools were closing down. I am extremely close to my brother who graduated from Rocky Mountain Academy a couple years ago, and without the help of RMA I truly believe he would either be dead or in jail. He has turned out to be a fine young man; RMA taught him skills to better his life and reminded him of the ones that had been taught by my parents but had been ignored. He finally learned to deal with things from his childhood and adolescence that had haunted him for years. He is one out of two of the people I admire and respect the most in this world. He always had a good soul, but it was only through particular staff members that he was reminded of it.
My heart goes out to all the families and students that are going through this pain right now. I'll never forget the hell my family went through during those times before RMA, and I can't even imagine what life would be like for all of us if he had abruptly been sent home halfway through his journey at the school.
It is undeniably wrong that CEDU charged parents antother full month of tuition knowing the schools were going to be mandated to close within days. My parents were one of the ones that had take out another mortgage on our home in order to help pay, along with the whole of their retirement savings and both me and my brother's college funds.
However, I do praise RMA and the other CEDU schools for their mission, but moreso the staff and counselors that worked day in and out to help turn the kids' lives around. The staff is the main reason for CEDU's high success rate.
It is devastatingly unfortunate that the money-hungary investors decided to pull the plug. Though I know it is wrong, a part of me wishes their families could have gone through the pain and crises my and many other families of CEDU have gone through. Then maybe they would have thought twice about slamming the door on one of the last opportunities some of those kids will probably ever have to positively and healthfully turn their lives around.
Posted by: Lynn | Monday, April 11, 2005 at 11:44 PM
i did the whole program at CEDU and while i didnt like it and still dont they saved my life i think is crap that brown closed it they bought it right after i left and i hope and pray they open that school back up i may have hated it at the time but now im a grow woman and make better choice thanks to them and i was hurt by the fact that brown closed my school down with 24 hours notice to the parents but i might say its a process and that is totally detrimental to all those younge children they have opened up wounds and left them to fester the cedu program is ment to be 2 and a half years long to get to our cores and rebuild i am soooooooooo upset that they have closed this school i cannot say enough
Posted by: Jennifer Lefler | Sunday, June 19, 2005 at 10:52 PM
Forbes article:
Posted by: liz Ditz | Tuesday, July 19, 2005 at 02:18 PM
What is the status of worker's comp claims in this bankruptcy proceeding?
I was injured while employed at a Brown School and was in mid claim when the school where I work (Ocala, FL) was taken over by another company that refuses to give cognizance to my claim. What can and should I do?
Posted by: John Greenwood | Tuesday, November 15, 2005 at 01:52 PM
As a student of CEDU in Running Springs 78/79, my horror story began when I graduated. I returned home ,turning my back on
many opportunities and returned to a life of mind numbing addiction and self pity going against all I had been taught. I was the kid who ran away the first day straight down the mountain cross country to San Bernadino. Only to be returned by my parents because they did'nt know what to do with me. Expelled from Two high schools and using PCP almost on a daily basis at 16. Much of it was very intense but never abusive, far from it. Myself and many others made up stories of poor treatment . What else can one do when your 16 full of anger and pain all knowing. Fabricate and over exaggerate. Teaching an adolescent to have respect for themselves and others when there off the edge is no easy task, but that is no excuse for physical abuse or humiliation. I don't know who was running the schools when you attended but I can assure you that was not the case when the Wasserman's,Padget's, Allgood's etc. etc. etc. were in charge. So please be careful not to make blanket accusation's or you might harm people who would never let what you speak of happen to another. Responses to this letter may be sent to frybri2u@hotmail.com. although I doubt this will ever see print.
Respectfully,
Brian Williams
CEDU School 78/79
Posted by: Brian Williams | Tuesday, November 06, 2007 at 06:57 AM
Its very informative for students who are learning the basis of computing.
Posted by: cheap computers | Monday, March 01, 2010 at 12:30 PM
Liz Ditz you never seem to amaze me. Your blogs are great!
Posted by: gn netcom headset | Friday, May 27, 2011 at 03:00 PM