REUTERS: Corinthian Colleges exec grilled as creditors hunt for cash

Career College Central Summary: 

  • A top executive of bankrupt Corinthian Colleges Inc on Friday detailed the for-profit higher education company's executive pay and recent financial dealings, as creditors began the hunt to find money to repay what they are owed.
  • Corinthian Chief Financial Officer Robert Owen spent four hours in a windowless government conference room discussing under oath everything from fraud allegations to questions about a $125.02 expense payment to an executive.
  • In April, Corinthian closed its remaining campuses without warning. It filed for bankruptcy in May. Debtors are required to meet with creditors to answer their questions, and on Friday the toughest questions came from a lawyer with the California attorney general's office, which has sued Corinthian for misrepresenting job placements for its graduates.
  • Corinthian also released thousands of pages of documents, including details of payments to Chief Executive Officer Jack Massimino. He received cash payments of $1.03 million in the year before the bankruptcy, according to court filings. The company agreed to pay him a $900,000 salary in 2014, according to securities filings.
  • The disclosures also showed that Corinthian paid out nearly $1 million in bonuses to executives, directors and managers in late June 2014. The bonuses were paid less than two weeks after regulators tightened oversight of the company, a move that hastened its demise.

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REUTERS

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