Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Test Preparation Company Seeks Bankruptcy Protection
Author: Joel R. Glucksman
Date: January 29, 2013
Key Contacts
Back
Education Holdings filing for Chapter 11 Bankruptcy Protection
High school and college students, who are preparing for the SAT and GRE tests in the hope of getting into a good school, now have – at least temporarily – one fewer option when choosing a test preparation company, as one popular service provider has filed for bankruptcy protection.
Education Holdings 1 Inc., formerly known as the Princeton Review, filed for Chapter 11 bankruptcy protection under bankruptcy law in a Delaware courtroom. The filing is a “pre-pack,” meaning that at least some of the creditors have already at least informally agreed to the debtor’s proposed plan of reorganization. The filing comes one month after the test-prep service settled fraud allegations with the United States. The company listed both assets and liabilities of between $100 million and $500 million. The company said it has specific plans to reorganize and expects to borrow between $4 million and $7 million to assist its efforts while it goes through the bankruptcy process.
Education Holdings’ prepackaged reorganization plan must be voted on by its senior secured claim holders, who are owed at least $36.3 million, second-lien facility claimants due $7 million, and other note holders owed more than $110 million, according to Bloomberg. If these entities formally agree with the terms of the reorganization plan, it will then be subject to court approval. Bain Capital Venture Fund LP was listed as the company’s biggest equity security holder, with a 9.7 percent stake. Falcon Investment Advisors LLC and Sankaty Advisors LLC are the biggest unsecured creditors, with each owed $56.3 million, Bloomberg notes.
The company agreed to a $10 million fraud settlement with the U.S. Department of Justice in December. The federal agency filed a lawsuit against Education Holdings in May, alleging that it accepted tens of millions of dollars in federal funds to provide tutoring and educational services to New York City school children that it failed to deliver.
A separate company, TPR Education LLC, is now operating as the Princeton Review, and is not part of these bankruptcy proceedings.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Understanding Portability for Estate and Gift Tax
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Author: Marc J. Comer
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
Author: Marc J. Comer
How Can Trusts Be Used in Business Succession?
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
Author: George McGowan
Read Before You Sign: IT Contract Pitfalls Every NJ Business Should Know
In today’s digital economy, New Jersey businesses of all sizes rely heavily on technology vendors, software providers, cloud platforms, and managed IT services. Whether your company is purchasing software, migrating data to the cloud, engaging a cybersecurity consultant, or entering into a long-term managed services agreement, a careful IT contract review can have significant operational, […]
Author: George McGowan
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
New Jersey Will Contest Grounds Explained
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Author: Marc J. Comer
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.