Overland Park-based Wright Career College has filed for bankruptcy and closed its campuses here and in four other cities, leaving about 1,000 current students upset and uncertain about how to finish their degrees or certification programs.
The company filed for bankruptcy Friday morning in U.S. District Court in Kansas City, Kan., under a Chapter 7 petition to liquidate its assets.
The initial filing estimated liabilities of between $1 million and $10 million and estimated the number of creditors at between 1,000 and 5,000. The petition included 75 pages of creditor names, a collection of business services and individuals.
“There are a lot of angry people, I understand that,” said Neil Sader, a bankruptcy attorney with Sader Law Firm in Kansas City who is representing the school. “But there was no way the college could continue. We now are operating under court supervision and proceeding as best we can under chaotic conditions.”
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The Overland park campus and those in Wichita, Tulsa, Oklahoma City and Omaha will be closed until Monday for a “cooling off period.” Sader said security has been hired to protect against vandalism. Some essential workers will return to the campuses Monday, but student documents aren’t expected to be available immediately.
“This is just crazy,” said Chasidy Mabry, a Wright student who said she’s about six months short of completing classes to become a surgical technician. “Whatever other schools might be taking our credits, it’ll be mixed up. Their courses may be different.”
Mabry said her student loans from Wright total $24,000 to $25,000 for the surgical assistant classes and a previous enrollment for another specialty.
“Until about two months ago, I hadn’t heard anything about them being in trouble,” Mabry said. “I’m so irritated.”
A bankruptcy service has set up a website for students and employees to get information about the Wright case. Carl Clark, an attorney with Lentz Clark Deines in Overland Park, will serve as bankruptcy trustee.
Wright’s demise follows a notable collapse of a similar for-profit career college company, Corinthian Colleges Inc. In that case, nearly 350,000 students took out some $3.5 billion in federal student loans to take Corinthian classes since 2010, according to the U.S. Department of Education. Since then, the department has developed new rules to govern student loan discharge requests.
A bankruptcy judge last year approved a liquidation plan that allocated several million dollars among former students at Corinthian schools, including Everest, WyoTech and Heald colleges. But it’s far too early to know anything about payments or possible loan forgiveness under the Wright bankruptcy.
Wright Career College filed its petition under the corporate name of Mission Group Kansas Inc. John Mucci signed the bankruptcy petition as president of the Mission Group.
Students were sent an email Thursday night that said “with our deepest regret” the school no longer was able to continue operations.
Some other career colleges are likely to accept students’ accumulated credits, but financial concerns remain for students and staff who have been left without paychecks for recent work. About 200 employees are affected in the five cities.
Employees were told they will be able to pick up personal items from the buildings next week and that they will be given information about how to file claims for lost pay. Sader said Wright employees as of Friday did not get their paychecks for the pay period that ended April 9 or 10.
Wright had provided classes primarily to help train students for jobs as medical assistants, accountants and other business occupations. It had reported about 3,000 students enrolled in its 2014-2015 fiscal year.
Last month, Wright indicated it was in trouble when it said publicly that it was in a “state of transition” after it laid off some administrative staff at its five campuses. It also said it had stopped accepting new students.
Taylor Atkinson, a Wright student who was studying to be a veterinary technician, said she dropped out of the program last month after getting unsatisfactory answers when she questioned the stability of the college and getting no help to access a website she needed for online classes.
“My future is unknown now,” said Atkinson, who was in her second semester of seven needed for certification. She said the full program was to have cost $35,000, and she just received a note that said $7,500 was due.
Another student, Dayna Mooney, said she has about two months left to graduate with an associate’s degree in a health care administration program and isn’t sure she can find a program that will allow her to finish, at least in a timely way.
“None of three options (suggested in an email to students) offer online classes, and (they) required multiple days a week of attending class on campus. As a mother of five and working full-time, this is hardly a viable option,” Mooney said. “But with $20,000 of student loans, I’m left with not many options.”
Sader, representing Wright, said the school had attempted to negotiate a formal “teach-out agreement” with similar colleges to ease student transfers.
“Unfortunately, that didn’t work out, timing-wise,” Sader said. But he held out hope that students individually can find transfer opportunities because “most of the schools have similar programs and will accept Wright credits to transfer.”
Mooney said Friday afternoon that she’d already researched transferring to one school but found that the next round of classes wouldn’t start until June 8, and that she would have to sign new loan agreements.
The students who face closed doors are not the first to have complaints against Wright.
In 2014, a group of former students joined a lawsuit that accused Wright of fraud and misrepresentation. The lawsuit, a group action by more than 160 students, argued that Wright wrongly advertised access to high-paying jobs. Wright refuted the allegation that it guaranteed jobs upon graduation.
That ongoing lawsuit contends Wright “entices prospective students to enroll and apply for student loans they cannot pay back through a systematic, deceptive marketing scheme.”
Kenneth McClain, an attorney in Independence who represents the former Wright students in the fraud case, said Friday that the case will continue to pursue claims with Chubb Insurance, Wright’s insurer.
“We’ve been fielding questions all day from students,” McClain said. “We’re still trying to determine what the options are to take care of as many people as possible.”
McClain acknowledged that the student lawsuit may have helped “put it under,” but he said Wright was following the path of Corinthian and other for-profit career colleges that have failed or had significant lawsuits filed against them.
Founded in 1921 to train typists, Wright originally was known as Dickinson Business School and, later, Wright Business School.
The Overland Park operations moved to a new location at 107th Street and Metcalf Avenue in 2012. The $5 million campus, marked by a clock tower, included a new two-story buidling and renovation of a former car dealership. It provided about 50,000 square feet of classroom space, capable of accommodating about 700 students, the school said at the time.
Sader said Wright leased rather than owned its properties.
The website URL for further information about the Wright Career College bankruptcy case is https://slfstudent.wordpress.com/. The website specifically for Wright students is https://slfstudent.wordpress.com/.