CEDU Closing: Impact on Employees Devastating

Stories from the community

struggling

CEDU shuts down schools

By LUCY DUKES and ELIZABETH CIEPIELA Staff writers

Less than a week after CEDU abruptly announced it was closing all its schools, shell-shocked former CEDU employees wondered what to do without three weeks of unpaid back wages and frozen 401(k) plans locked up because money paid by employees allegedly wasn't put into them prior to CEDU's chapter 7 bankruptcy filing.

CEDU was the largest private employer in Boundary County with 130 on staff. Another 103 of the company's estimated 300 regional jobs were in Bonner County, with the remainder located in Kootenai County, Washington and Montana, according to Idaho Commerce and Labor. Local officials called the job loss "devastating." Idaho Commerce and Labor is bracing for a potential jump in Boundary County 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.

Commerce and Labor is organizing two community meetings on April 13, one in Bonners Ferry and one in Sandpoint, to provide information to those who worked at CEDU. 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. Former employees packed the Bonners Ferry and Sandpoint Commerce and Labor offices on Monday, and on Tuesday, a Wells Fargo account had been set up to help staff of Boulder Creek Academy. A skeleton crew was closing down operations at CEDU schools this week, hoping they'd get paid even though the company filed for Chapter 7 bankruptcy in Delaware on Friday at 9 p.m. EST.

Parents of students at the schools scrambled to get them home and find solutions. Many of them will not get tens of thousands in prepaid tuition refunded.

Boulder Creek Academy Director Paul Johnson, who said parents had been "ripped off" by the abruptness of the closure and lack of refunds, said the frozen 401(k)s would not be released until an audit had been conducted -- which could take several months. He was angry that money paid into the 401(k)s didn't end up there. "That's criminal in my mind," he said.

The schools, which charged about $5,900 per month for tuition, were attended by children of well-to-do parents and children of people who had mortgaged their homes to put their children in the program.

Experts were scrambling to find out what caused the largest and most abrupt closure they'd 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. None realized the business was in such poor financial condition. Unconfirmed reports indicate the company could not pay its debts. CEDU's bankruptcy trustee, George Miller, could not be reached for comment. 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.

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. Woodbury, who has worked for more than 16 years in the industry, notified his subscribers of the closure and of the need to help parents, students and former employees. The response has been tremendous, he said.

CEDU did not disclose the cause of the financial difficulties, attributing the problems to "a number of factors." The financial decision makers, George McCown and Jeff Zawadsky of McCown and De Leeuw and Co. -- the investment firm that owns CEDU --did not return phone calls, and by Tuesday morning, Idaho Commerce and Labor staff were still trying to find answers that remained elusive. They did not know whether labor laws requiring 60-day layoff notice to certain employees had been violated, and questions remained about health insurance. Commerce and labor staff also wanted to know more about three weeks of back pay not issued to CEDU employees on Friday, when the announcement was made.

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."

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. The suddenness of the announcement and lack of preparation for students angered some parents. "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.

Parent John Head of Lawrence, Kansas, also felt the loss. His daughter attended Northwest Academy. "She gained tremendously from this mix, this special mix of emotional growth and academic achievement," he said. "My wife and I and our daughter were extremely pleased with the treatment she got here at Northwest Academy. There was a loving and supportive environment that our daughter benefited from tremendously," he said "One hope that I have is that people who have been dedicating their lives to this school will find ways that they will continue to use their talents for this sort of work," he said. The commitment of the staff has been "squandered," he said, and many of the parents were "left in a lurch" by the closure. "I'm angry and deeply disappointed that the circumstances arose as they did," he said. The abruptness of the announcement and implementation of the closure appeared callous, but those weren't decisions made at the schools, Head 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 locate 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."

• 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

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Comments

[Phil Kelley]

Hello,
I was a student at the Hilltop institue of Running Springs, California in the early 90's. I ran away from the program after 1 year and regret it greatly everyday. I was wondering if I could get any information on the counsilors or students who were there around the same time. I really miss and worry about them and would love to contact them if possoible. I would greatly appreciate any help if possible.
Thankyou
Phil Kelley

[Survivor 1980]

Phil, get help.

You would of regretted it much more if you had stayed and drank the kool-aid.