With the closure of Bryman College and sister school BioHealth College, programs to protect its more than 300 students sprang into action, helping them obtain tuition refunds and loan forgiveness.
But for the colleges’ 85 employees—who were laid off without payment of wages they were owed or severance—there’s no safety net.
Former employees of the California campuses have told Bankruptcy Beat that no one received paychecks on Aug. 1, the payday following the July 25 shutdown, and that many July 16 paychecks bounced. Left jobless and frustrated, the employees are navigating the bankruptcy system to recover their wages and are finding their odds of payment to be grim.
A lawyer representing Bryman and BioHealth in their bankruptcy case declined to comment on the employees’ situation Tuesday.
The schools’ parent company, which filed for Chapter 11 bankruptcy in July and shut down days later, lists the employees as unsecured priority creditors (a group in bankruptcy cases that often receives only partial payment) owed $96,597.30, according to recently filed court documents. This doesn’t include the $121,590 Chief Executive Sam Shirazi says he’s owed.
The documents likely vastly underestimate the amount of employee claims, as the majority of the workers are listed as being owed nothing. No employees received a final paycheck, several former employees told Bankruptcy Beat.
On Monday, the company requested that its bankruptcy case be converted to a Chapter 7 liquidation, which would put a trustee in charge of winding down what remains of the schools’ assets and repaying creditors.
A judge will consider the request on Aug. 28.
Bryman Colleges, located in San Jose, San Francisco, Hayward and Los Angeles, were acquired in January 2013 by BioHealth College Inc. from Corinthian Colleges Inc., a for-profit college operator with more than 100 schools that is now in the process of winding down its own operations. They had previously been operating under the Everest College name. Corinthian paid BioHealth $2.3 million in January 2013 to take over these schools, according to filings made with the U.S. Securities and Exchange Commission.
Write to Stephanie Gleason at stephanie.gleason@wsj.com. Follow her on Twitter @stephgleason.
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