3 Art Institutes in limbo have possible buyers, receiver says
- Some of the key remaining Art Institute campuses owned by Dream Center Education Holdings (DCEH) have potential buyers interested in taking them over. Mark Dottore, a court-appointed receiver for DCEH and its remaining assets, said in an interview he has been in touch with suitors for Art Institutes in Pittsburgh, Seattle and Las Vegas.
- Dottore has shelved plans to close AI Pittsburgh and AI Las Vegas. A spokesperson for the U.S. Education Department confirmed in a statement that Dottore has halted teach-out plans at Pittsburgh and other Art Institute campuses so he can "conduct an assessment of operations and make a determination for the campuses going forward." Those campuses are not enrolling new students until there is certainty about their fate, Dottore said. But plans to close them by March 31 "aren't going to happen," he added.
- The organization that took over eight other Art Institutes earlier this year is also interested in Seattle. Dottore wouldn't name the suitor of the Pittsburgh campus but said the prospective buyer owned other colleges.
Welcome as the news may be to Art Institute students and faculty, there is still much confusion and uncertainty on those campuses now up for sale in receivership as students try to process information, weigh their options and wait to learn their schools' ultimate fate.
Dottore said students were his main priority and that he was working as quickly as he could to secure deals for the campuses.
In January, DCEH, owned by the faith-based Dream Center Foundation, turned over eight Art Institutes in a deal with another nonprofit, Education Principle Foundation. The organization, along with its remaining colleges, went into receivership later in the month.
All other Art Institute campuses held by DCEH besides Pittsburgh, Seattle and Las Vegas were already slated for closure and have been teaching out students. Since then, students, faculty and staff have reported being largely in the dark about the changes underway.
Compounding the chaos at AI Pittsburgh, the school's interim president, Elden Monday, recently resigned, according to an email obtained by Education Dive that campus board chairman AJ Braswell circulated to employees. With Monday's departure, the board will take over more direct oversight of the campus, Braswell said.
Argosy University, also owned by DCEH, has a potential buyer. The university's accreditor in January ordered Argosy to show cause that it should not lose its accreditation due to financial concerns.
DCEH acquired the Art Institutes from Education Management Corp. (EDMC) a little more than a year ago. Revenue proved drastically short of EDMC's projections ahead of the deal, DCEH said in court papers. When it went into receivership, DCEH faced mounting operating losses, in the tens of millions, as well as eviction and default notices from landlords.
The organization has been sued by students in Illinois over allegations it misled them into thinking Art Institutes were still accredited when it had actually been revoked pending a post-acquisition review. Since the takeover, DCEH has also run into compliance issues with a consent judgment from a court settlement with EDMC that carried over through the acquisition, according to documents attached to a recent court filing in DCEH's receivership proceedings.
Among other concerns, a third-party compliance auditor flagged a partnership between the nonprofit DCEH and for-profit coding school Woz U, which had financial ties to DCEH leadership. (The Republic Report has tied Woz U to Brent Richardson, former chief of DCEH.) DCEH ultimately abandoned the initiative, but the incident raised questions about the use of DCEH's nonprofit status for profit-making, the auditor said.
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