Corporate Restructuring

Dear Colleagues:

The last several years have brought enormous change to the higher education landscape and, specifically, to our education systems. The shifting landscape, coupled with the vast amount of debt and fixed operating costs inherited when Dream Center Education Holdings (DCEH) acquired the education systems from Education Management Corporation (EDMC) in October 2017, has brought significant challenges to our operations. As the next phase of our transformation plan for these institutions, there is an important update we are communicating today.

DCEH has negotiated a corporate restructuring with assistance from the U.S. Department of Education (DoE), our senior lenders and other strategic partners that is designed to ultimately allow South University, Art Institutes and Argosy University to thrive as independent university systems run by autonomous Boards of Trustees and not weighted down by the enormous corporate overhead left from EDMC.

The restructuring includes:

The ownership of South University (South) was transferred to an independent non-profit foundation not affiliated with DCEH. Steve Yoho will continue to serve in his capacity as Interim Chancellor.
Argosy University (Argosy) remains in its current state of ownership affiliated with DCEH while we negotiate a new strategic partnership for Argosy. Cynthia Baum will continue to serve in her capacity as Chancellor. Western State College of Law (WSCL) will be separately incorporated, but still affiliated with Argosy.
The ownership of The Art Institutes (Ai’s) not being taught-out were transferred to an independent non-profit foundation not affiliated with DCEH. The respective Ai’s Institutional Presidents will continue to serve in their current capacities.
We will continue evaluation of all campus locations across education systems to determine where students can best be served.
A new managed service provider not affiliated with DCEH has been engaged to provide the necessary technology, services and support (enrollment, marketing, student services, and career services) that will be needed to maintain operations at Ai as well as at South and Argosy. They will be working with DCEH to align staff and services over the next few weeks.
DCEH’s lenders have provided bridge financing to DCEH to help in this restructuring.

This restructuring is significant and, as such, the important work of partnering closely with our accreditors, state licensing bodies and the DoE will continue in order to provide favorable outcomes for our students.

Thank you for your unwavering support of our students. Make no mistake, they are the reason we all do what we do. You will continue to be informed as this restructuring plan is implemented.

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19 replies (most recent on top)

Restructuring notice on a Monday preparing for layoffs on Friday?

Oh, those boys just made a mess of things didn't they. Arrogance has its consequences.

1cqe I wonder the same thing - so it could just be a method - so dceh gets out of filing bankruptcy

create fake companies to push each of the schools into - they are sold -- which is legal but the whole thing is just fake. My 2 cents

Ai Las Vegas is not a teach out campus.

YET

Ai Las Vegas is not a teach out campus.

I am curious as to why anyone would want to buy the Ai schools when most of their programs cannot pass the gainful employment guidelines?!

What happens to Ai Hollywood and Ai San Diego, since they are Ai schools that are not being taught out but are part of Argosy?

Argosy was the focus from the beginning. Now DCEH has "One University" left to build a Grand Canyon like university. A major restructuring message sent after most had left the office. How professional!

1ayi It can be assumed to mean ALL Ai's not on teach out - is Ai Las Vegas on teach out?

'The ownership of The Art Institutes (Ai’s) not being taught-out were transferred to an independent non-profit foundation not affiliated with DCEH'

Is AI Las Vegas included?

Wow Argosy was the only profitable brand and it only made a little over 14 million last year. South and AI must be tanking hard.

So what happens now if we need to use the insurance? it's now defunct if they no longer own the schools.

A separate email to Art Institutes staff from Claude Brown, system president of those schools, reveals that the new managed service provider is Studio Enterprise: "To assist in this operational transition, some of our non-academic services will be provided to us by Studio Enterprise via a standard managed services agreement. Studio Enterprise does not have any ownership interest or control over The Art Institutes or EPF." The Los Angeles-based for-profit Studio Enterprise describes itself as a provider of services to the also-LA-based for-profit Studio School, a branch of for-profit Hussian College. A major investor in Hussian is the New York-based investment firm Colbeck.

DCEH isn't keeping any of it - they will hold onto Argosy until a new strategic partnership comes along.

https://www.republicreport.org/2019/dream-center-schools-announce-devos-blessed-restructuring/

"Such an approach would be consistent with the recent and proposed conversions of for-profit schools including Kaplan/Purdue Global, Bridgepoint, and Grand Canyon, the Arizona-based college previously run by Brent Richardson, who is now the CEO of DCEH. That structure allows a school to advertise itself as non-profit, thus avoiding the stigma created by the predatory behavior of many for-profit schools, and avoid the federal regulations that apply to for-profit schools, while allowing a for-profit company tied to the school to keep making big profits off students and taxpayers, and to retain incentives, at least, to act in a predatory manner.

"The new approach also is consistent with evidence that emerged that Richardson was from the start seeking to leverage non-profit DCEH to make money for for-profit schools and other businesses in which he and his family and close associates were invested. Finally, the new DCEH structure is consistent with new proposals by the DeVos Department of Education, scheduled to be debated in public starting tomorrow, that would allow taxpayer money to finance the wholesale shift of education services from entities separate from accredited colleges.

Can anyone explain what this service provider is going to do? It sounds like they are replacing us?

Alot of ambiguous language but at least they told us what is going on finally.

I wish they would give more information

The below article states that "Under the plan, Dream Center will keep the Art Institute of Pittsburgh, Art Institute of Las Vegas and the Argosy University campuses.", but this letter says nothing about that. Anyone know?

Thread regarding Dream Center Education Holdings, LLC (DCEH) layoffs

Corporate Restructuring

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