CEDU Closing: It's Your Fault, No It Is YOUR Fault, Oh, Let's Blame It On Them

Issues that need to be separated out: 

1. Excess of expenses over revenues  (the previous Brown / CEDU administration is responsible for that one)
2. Spinning off assets, but not liabilities (litigation from closed / sold units)
3. Lack of  reserves (continuing to admit students without reserves to complete the program--paying for past students' expenses with income from current students)
4. Sudden closure  (the previous Brown / CEDU administration)

Lawsuits Lousy management played key role in CEDU closure
Posted: Wednesday, Apr 06, 2005 - 08:36:43 am PDT
By ELIZABETH CIEPIELA--Hagadone News Network

BONNERS FERRY -- Lawsuits against CEDU schools played a large part in the schools' closure and Brown Schools Chapter 7 bankruptcy filings, CEDU officials said Monday.

"The legal settlement and fees did play a role in the Chapter 7," said Sam Singer, a spokesperson for McCown, De Leeuw, & Co. (MDC), which owns CEDU. "There were a number of lawsuits left over from the Brown Schools ownership of therapeutic in-patient psychiatric hospitals, which continued to be on the books for a long while and were one of the reasons that the schools had financial issues."

Pete Talbott, chief executive officer of CEDU, agreed legal troubles played a role in the schools' closure.  "It certainly was one of the factors ... involved," he said. "I don't know what the percentage would be in terms of its impact, but it was a relatively large factor."

MDC is the private California-based equity firm. The financial services company TIAA-CREF -- or the Teachers Insurance Annuity Association, College Requirement Equity Fund -- was one of CEDU's lenders.  CEDU bankruptcy papers cite nearly $1 million in legal fees among the largest 40 creditors.  Another reason for the closure and bankruptcy, Singer said, was stiff competition from other schools.  Enrollment at CEDU and Brown Schools had been steadily declining, he added.

Five lawsuits filed late last year by former CEDU students and parents against CEDU-owned Rocky Mountain Academy, Boulder Creek Academy and ASCENT -- all located in North Idaho -- are still pending for unspecified amounts.

Prior to becoming CEDU president on March 17, Talbott worked for MDC. Talbott said he was brought in to help save the schools by attempting to file a reorganization Chapter 11 bankruptcy. Under that option, the schools would continue to function while finances were reorganized.

His petition to obtain a bridge loan to sustain the schools was denied by TIAA-CREF, he said. So just eight days after being made CEDU chief executive officer, the schools filed Chapter 7 liquidation bankruptcy and abruptly told faculty and students to go home mid-semester.

He's frustrated and frank. And he blames TIAA-CREF.  "They had full access to the financial data and they knew if they didn't help the company in the very near term that we were totally insolvent and that we did not have any choice other than to file Chapter 7," Talbott said.

Talbott said officials thought they had a plan worked out but "at the 11th hour, the 11th-and-a-half hour, we could not pull it together."  He blames the failure on TIAA-CREF and MDC.

But TIAA-CREF spokesman Glen Weiner said, "TIAA-CREF was a passive lender and under the law a lender is not allowed to manage or control someone else's business. It is the responsibility of the owners and operators of a business to provide adequate funds and pay the bills."  He would not go into any more detail.

"It is our policy not to discuss active legal matters but what I can say is TIAA-CREF was a passive lender, and we are working with the bankruptcy trustee to bring the situation to as smooth a landing as possible," he added.

In the meantime, bankruptcy trustee George Miller said he's not prepared to analyze the factors that led to the bankruptcy filing. Right now, he said, he's more concerned with trying to keep the schools open.

Brown will be visiting CEDU schools in Bonners Ferry today.

"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.

CEDU Posts:

• 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

Comments

[Sarah DeCocco]

I attended North West academy which was a cedu school all it did was fuck up my life even more.. One of the men who was a teacher there or consuler whatever they made us call them always said creepy sexual things to all the girls. you cant just take kids away from everythin in civilization and then put them back in it after going throgh those little seminars ya'll called prophets. It was all a bunch of lies. Once you put someone back into civilization if they haven't recieved the right kind of help they'll just fuck up again. Talk to your kids let them make mistakes they will learn eventually. If they have a serious problem send them to rehab or AA meetings. This will help them alot more then a bunch of mormans telling us that kissing boys is bad and makeup is bad and tv is bad and everything is bad. and you can't watch the news and you have to go to bed at 900 even though your 18

[Susan Weddle]

North West Academy, Accent, Rocky Mount all played a part of getting my son back in touch with life and saved him and our family unit! My son would not be here today funtioning in life if I had not interceded and moved him 3,000 miles to the CEDU program! It worked for him and our family. During our time at CEDU I obserevd the program and watched young students struggling succeed for the first time in life. My heart is sad for Sarah never seeing the benifits of the program. My son is 27 years today and we are proud of him and his time at CEDU!!!!!!!!!!

Susan Weddle

[Danny]

Did you know at lest two students came up missing and were never found from CEDU school in California? One, CEDU has gone through great legths to cover up, my brother Blake Wade Pursley in 1994. It is believed he was NOT a run away, but something happened at the school or someone connected with the school has him. The other Daniel Yuen in 2004 is believed to be a run away, according to school officials, but has never been heard from again.

[Liz Ditz]

Here are the details on Blake Wade Pursley, from the Charlie Project:

• Classification: Endangered Missing


• Date Of Birth: August 18, 1979


• Age: 14 years old


• Height and Weight: 5'5, 125 pounds


• Distinguishing Characteristics: Caucasian male. Brown hair, blue eyes. Pursley has scars on the back of his head, on his left buttock, on his right knee, across his neck, across his abdomen and on his chest. Some agencies may spell his middle name "Wade." His left leg is four inches shorter than his right leg and he walks with a limp as a result.


• Clothing/Jewelry Description: Blue jeans, a purple shirt, a black White Sox baseball cap and tennis shoes.


• Medical Conditions: Pursley suffers from various medical problems as a result of a near-drowning accident he had as a toddler. His difficulties include one paralyzed vocal cord, a life-threatening internal fungus, poor motor skills in his right arm, and seizures. Pursley is required to take daily medication to prevent his seizures and will be in danger without it. His intelligence is unimpaired, but he has learning and behavioral difficulties and functions at the level of a nine-year-old.

Details of Disappearance

Pursley was living at a special needs boarding school, the Cedu School, in Running Springs, California at the time of his disappearance. He had enrolled in the school for less than a month and told his mother he was homesick and wanted to leave. He was last seen at 8:00 p.m. on June 26, 1994 as he walked to a barn on the property to check on the animals. A witness saw a light go on in the barn shortly afterwards. Pursley did not return to the residence by the 10:00 p.m. curfew and and has not been seen again. Searchers tracked him to a nearby highway, but no further.

There were numerous reported sightings of Pursley in Utah in 1994 and 1995, but none of them have been confirmed. He is from Flagler, Colorado and may be somewhere in that state. Many agencies classify Pursley's disappearance as that of an Endangered Runaway. The school officials believe he ran away, but his family thinks he may have been abducted or lured from the school grounds. Curiously, Pursley is not the only student to have disappeared from the Cedu School and never been found; Daniel Yuenapparently ran away from the school in 2004 and has not been located. The Cedu School filed for bankruptcy and closed in 2005.

No suspects have been identified in Pursley's disappearance and his case remains unsolved.

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[Adam Rose]

I'm glad they are out of business... I went there from 1988 to 1991 in RMA... That place was wrong in every sence of the way, from their propheets to their workshops... I'am not a better person because I went there, I think I'm worst.

[Anna]

There's a third boy who is missing from the CEDU school in California, John Christopher Inman (his profile is on the Charley Project as well). He disappeared in 1993.

Daniel Yuen's case is disheartening enough; there's nothing to discount his being alive, but he hasn't contacted any of his relatives since his disappearance. John Inman's and Blake Pursley's is worse; both boys had medical conditions that required regular medication. It's not impossible, but highly improbable that both these boys ran away.

But three boys are gone, the school's gone and the school officials can tidily walk away from whatever circumstances occurred to those students.

[C.Doherty]

I've ranaway from that school more times than I care to count.One of those times I went right over the mountain and got lost for over 2days.I was rescued by forest rangers.I could have easily died.I was there in '79.I pray that did not happen to these boys

[Sarah decocco]

North west academy ruined my life. My parents have finally sort of apologized for sending me there. And you know what? Hey that's progress. I'm 25 now and I will still say that nwa messed up my life and I still have mite mares that I'm being pulled out of my bed, stripped searched, forced to hike ovrer 2 miles daily with more than 80 pounds strapped to ur back.also it went from snowing to raining for days to so hot I was going to pass out. And did I mention I had mono? Yeah no one believed me till finally days later they took my temp it was 102.5. Not good not good at all. This was at suws of the carolinas. Nwa a cede school was worse. And u know what I ran away the month I turned 18 and made it all the way from northern Idaho to north Carolina. Any nwa survivors want to talk email me Smdecocco@gmail.com. I'm thinking about writing a book about everything I went through there.
Love
Sarah