"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
- Other Articles on Therapeutic Boarding Schools and Treatment Programs
target
well-positioned but underperforming businesses and restructure them to
stress empowerment of employees, creativity, and openness.
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