ITT Educational Services Inc., the 70-year-old for-profit college operator that shut down its 136 technical schools last week, has hired advisers to liquidate its assets, according to one of the firms brought in to handle the sales.
The Carmel-based company, which ran campuses in 38 states, appointed turnaround specialist Alvarez & Marsal and law firm Faegre Baker Daniels, according to people familiar with the matter, who asked not to be identified because the process is private. Liquidator A&G Realty has also been hired.
“We are selling all the assets including the real estate,” A&G CEO Andy Graiser said in a phone interview.
Whether the liquidation will be handled in bankruptcy court or out is still being discussed and will be decided within days, the people said.
Reuters reported the hires earlier Thursday.
Representatives of Alvarez & Marsal didn’t immediately respond to requests for comment on the matter. Faegre declined to comment. ITT CEO Kevin Modany didn’t immediately respond to an e-mail seeking comment.
ITT’s shutdown was one of the largest in U.S. history, leaving over 35,000 students stranded. The school said it was forced to shut its doors after the U.S. Education Department demanded a steep increase in the security the company would have to post to guarantee federal student aid. More than 8,000 employees were affected, with the majority losing their jobs on Sept. 6.
Cerberus Capital Management told ITT this month that it was in default on a senior secured loan and demanded immediate repayment of the $34.5 million outstanding. The lender also exercised its control over ITT’s bank accounts, having any remaining cash balances transferred to Cerberus, according to a Sept. 14 regulatory filing.
Since August 2014, ITT has been under financial and operational scrutiny by the U.S. Education Department. The agency expanded its oversight in June, citing “significant concerns about ITT’s administrative capacity, organizational integrity, financial viability and ability to serve students.”