Secured $28 Million Settlement in Alleged Breach of Fiduciary Duties Litigation Against Former Officers and Directors of For-profit College
March 10, 2023
John F. Kennedy v. Avy Stein, et al.
Robins Kaplan secured a $28 million settlement on behalf of the Receiver for Education Corporation of America (ECA), a privately held company that operated for-profit colleges across the United States.
ECA operated and enrolled approximately 20,000 students on over 70 campuses at its height. On December 4, 2018, the Accrediting Council for Independent Colleges and Schools suspended ECA’s accreditation. The company abruptly announced its closure days later, forcing its students out without the ability to complete their education and without information on where they could continue their education. The Receiver alleged that the former officers and directors of ECA did nothing to avoid the ultimate disorderly closure, despite knowing that ECA faced an existential crisis.
The settlement covers claims against several former officers and directors of ECA for allegedly breaching their fiduciary duties of care and loyalty to ECA for not giving students an ability to complete their education in the event the schools closed. This settlement will be used to pay more than 2,000 creditors, including students.
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