Defunct Colleges' Owners Can't Escape $50M Self-Dealing Suit

By Dave Simpson (October 1, 2021, 10:26 PM EDT) -- A Georgia federal judge Friday rejected all six reasons the owners of a group of defunct for-profit colleges put forth in a bid to dismiss a $50 million suit from a receiver alleging they took part in self-dealing as the schools spiraled into financial collapse.

U.S. District Judge Tilman E. Self III allowed the suit from Education Corp. of America receiver John F. Kennedy to move forward, brushing off defense arguments that Kennedy's complaint was a shotgun pleading, or that Kennedy himself is responsible for the schools' insolvency.

"Defendants' detailed and well-written briefs in support of their dismissal motion clearly belie any...

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