ITT files for bankruptcy
ITT Educational Services Inc. is unloading its assets after the shutdown of more than 130 campuses.
The Carmel-based company filed for Chapter 7 bankruptcy late Friday, initiating a trustee-guided liquidation process. It was the final move for the for-profit college operator, which last week announced it was shuttering its campuses and earlier this week disclosed it was ceasing all business functions.
ITT listed both its assets and liabilities at between $100 million and $500 million.
Jay Jaffe, an attorney for law firm Faegre Baker Daniels, who is representing ITT, did not respond to a request for comment. ITT this week laid off the remainder of its staff, including spokeswoman Nicole Elam.
ITT is the second major for-profit college operator to file for bankruptcy in the past two years amid a federal crackdown on the industry. Corinthian Colleges, which had nearly double ITT's number of students, went bankrupt in May 2015.
ITT has blamed its demise on overzealous government regulations. With ITT's accreditation already under review, the U.S. Department of Education in August issued several devastating sanctions, including a ban on enrolling new students who rely on federal aid.
But ITT's critics say the company created its own problems. ITT faced fraud charges from the Securities and Exchange Commission and investigations and lawsuits from about 20 state attorneys general. Government agencies have scrutinized the company over an alleged failure to disclose bad loans to investors, inflated job placement numbers and aggressive recruiting tactics.
As recently as the beginning of this month, ITT asserted in an SEC filing that it was trying to stay afloat by negotiating with the Education Department for terms that would let it stay in business. But ITT threw in the towel Sept. 6, announcing it would close all its campuses.
ITT on Wednesday disclosed that its senior lender, Cerberus Capital Management, seized the company's bank accounts. That move forced the company to cease operations Friday.
ITT's closure displaced more than 35,000 students and more than 8,000 employees, including at least 662 workers in Indiana. The company employed 275 people at its Carmel headquarters.
About 1,000 Indiana students were enrolled to start classes at ITT this month. Several colleges are offering incentives to former ITT students who want to continue their education. Colleges that are pitching themselves to ITT students include Ivy Tech Community College, Harrison College, Oakland City University, Indiana Wesleyan University, Western Governors University Indiana and the Indiana Institute of Technology.
Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.