Florida Career College — dba Anthem College and High-Tech Institute — was a national for-profit vocational technical college with 30 campuses nationwide.
The college, like other for-profit secondary education models, were flagged by the Department of Education for a series of issues related to its mismanagement of finances and student performance. Federal funding was cut off and the company failed under the weight of its overall debt obligations. The company immediately sought protection in the Federal Bankruptcy Court. Of all the locations, the Arizona Campus was the one sole asset of the pool of syndicated Lenders as the other locations were lease hold interests.
Upon filing for bankruptcy protection all staff were immediately terminated, students were locked out without notice and many of the campus locations were abandoned.
Upon this assets’ relief from stay the bankruptcy court, Resolute was appointed for its ability to unravel complex entanglements and create a process to monetize the pool of assets. The Resolute team started to forensically diagnose the operation and assets to understand the best plan of action. The goal of the Receivership was to maximize the recovery of real property and personal property assets for a pool of syndicated lenders who held debt obligations for the enterprise.
This process was not as straightforward was originally believed. Because of its connection to having received Federal Financial Aid and alleged operational or financial mismanagement, there were a series of regulatory requirements that needed to be addressed to remove contingent liabilities. Working with the AZ Department of Higher Education we were able to establish a custodial relationship for all past and current student files.
Monetizing otherwise straightforward assets like FF&E required vetting of potential buyers to determine their lack of connection to the educational system and potential implications posed within.
The real property showed serious neglect and disrepair. Team members were able to rehabilitate the property to establish a baseline of operation and address all previous liabilities from a State and Local Tax perspective.
Resolute was able to tackle a complex situation and create a sales process that enhanced the inherent value and ensured a successful transaction. The Resolute team secured a qualified buyer for the real property asset which is currently in escrow for above market value.