Defunct College Owners Accused Of Self-Dealing In $50M Suit

By Brett Barrouquere (April 1, 2021, 5:08 PM EDT) -- The owners of a group of defunct for-profit colleges are being sued by a receiver who is seeking at least $50 million in damages, saying those in charge of the Education Corporation of America took part in self-dealing as the school spiraled into financial collapse.

John F. Kennedy, the receiver for ECA, which ran Virginia College LLC and the Brightwood Schools, said in a complaint filed Wednesday that the owners knew the schools were insolvent but still allowed for a disorderly closure, leaving the school on the hook for upwards of $100 million in student loan discharges.

Kennedy brought the suit...

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