UPDATE 03-11-19 6:55 pm:
In the Ohio court today, Judge Polster decided, against the wishes of both the Department of Education and a group of students, to keep DCEH receiver Mark Dottore in place for up to six more months.
According to people present in the courtroom: Polster initially suggested he had been blindsided appointing the receiver without being apprised of all the facts. But the argument in favor of keeping the receiver that seemed to carry the day for Polster — an argument pressed by both Dottore’s team and John Altorelli, the lead lawyer for Studio — is that the surviving South University and Art Institutes schools needed the old EDMC/DCEH technical platform to continue operating. It was unclear why Dottore, who only entered the picture this year, was needed to keep the platform going.
The hearing also failed to get to to the bottom of the alleged diversion of student funds. Dream Center Education Holdings chair Randall Barton appeared in court and said he had no expertise in the relevant accounting issues, while DCEH’s head of student accounts described the financial mechanics but had no explanation of what happened to the money. Michael Frola, the Department of Education official who cut off Argosy’s funding, citing in part the missing money, also discussed mechanics of federal aid but had no answers.
Polster indicated that extending Dottore’s term would also allow the receiver to keep investigating the missing money, notwithstanding that the Department of Education has accused Dottore himself of mismanagement.
In other matters:
— The parties explained that the two South University campuses retained by DCEH/receivership would be taught out by South campuses now operated by EPF/Studio. With the landlords for those campuses demanding to be paid, it’s unclear how the logistics of that arrangement would work out.
— Western State College of Law, part of Argosy, says it has financial support from lenders to meet payroll long enough to allow this year’s third-year students to graduate. Studio also indicated it might seek to take over the law school.
— The Art Institute of Las Vegas, also part of the receivership, is the focus of a local civic effort to keep the school alive.
— There was no mention of plans for Ohio’s Eastern Gateway Community College to take over pieces of Argosy, Ai online, or anything else.
The hearing signaled yet another reshuffling of alliances in this mess. The Department, which had anointed Studio the savior of DCEH schools, forcing the arrangement on DCEH, is now aligned with the lawyers for students in urging the cancellation of the receivership. Studio is on the other side of the Department, aligned on this issue with receiver Dottore, who was DCEH’s pick for the role. DCEH, according to a source close to management, is somewhere in between but for now prefers receivership to bankruptcy.
Dottore has now pointed fingers at both Studio and DCEH, while Studio has blamed Dottore, and the Department has blamed DCEH and Dottore.
Caught in the middle of all these complicated folks and their hordes of lawyers are all the faculty and staff losing their jobs, the taxpayers who will be forced to cover a huge bailout, and the students whose futures are very much at risk.
https://www.republicreport.org/2019/devos-fiddles-schools-burn/