Corinthian Colleges To Sell, Close Most of its 107 Campuses
June 25, 2014
In a preliminary deal with the U.S. Department of Education, Corinthian Colleges Inc. proceed with its plan to pursue strategic alternatives for its operations, including the sale and teach-out (i.e. closures) of some of its schools.
Corinthian currently serves about 72,000 students at 107 campuses and online.
Santa Ana, California-based Corinthian Colleges and the Department agreed upon a Memorandum of Understanding (“MOU”) under which Corinthian will immediately receive $16 million in federal student aid funds earned through enrollment, avoiding an immediate cash shortfall that will allow its students to continue their educational programs as planned.
The Department and Corinthian have agreed to finalize the details of the transition by July 1, 2014.
Under the MOU, Corinthian will continue to seek new owners for most of its campuses with the goal of entering into definitive sales agreements with one or more third parties for such campuses within approximately six months, and will proceed in an orderly fashion with the “teach-out” of schools that are under-performing.
Although Corinthian said it believes the MOU is a positive step, the company will still need to obtain additional sources of liquidity to fund its operations. Corinthian may continue to seek additional sources of liquidity through new financings, additional cost reductions, accelerated asset sales or some combination thereof.