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Financially Distressed Educational Institutions and Bankruptcy: Options for K-12, Higher Education Institutions

Recording of a 90-minute CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, June 17, 2020

Recorded event now available

or call 1-800-926-7926

This CLE course will guide counsel who advise K-12 and higher educational institutions in the financial crisis. The panel will discuss legal issues when dealing with negative cash flow and uncertain economic prospects, including bankruptcy, restructuring, and funding options. The panel will also discuss practical tips for getting lenders and other stakeholders to cooperate fully when hard choices are required.


Financial stress on K-12 and higher education institutions will continue and escalate for the foreseeable future. In 2019 Moody's estimated that 20 percent of small private colleges were in a state of "fundamental stress" due to declining revenues, rising expenses, and little power to increase tuition. Many private K-12 schools are facing financial strain similar to small colleges.

This instability is unlikely to right itself with the passage of time or a good economy because supply has outpaced demand. Demographically, the birth rate declined significantly between 2008 and 2013, meaning there are fewer students to fill open places and generate tuition revenue. During this period of declining births, schools expanded, adding faculty and administrators and increasing overhead.

Without deliberate intervention, these schools will shut down, creating a host of complicated problems for all interested parties. Finding and implementing solutions requires hard choices and robust restructuring tools. In addition to working with bankruptcy and restructuring practitioners, counsel to schools will benefit from retaining a team of subject matter experts to advise on administrative changes, curriculum updates, identify available financial resources, and to negotiate with lenders, teachers, and others.

Listen as our panel, who have successfully worked with distressed institutions, explains the options available to schools and practical tips for dealing with lenders and boards of directors.



  1. Special issues when closing schools
    1. Elementary, high school, colleges
    2. Accreditation
    3. Record retention and access
    4. Privacy issues
  2. Bankruptcy
  3. Mergers, asset dispositions
  4. Finding capital


The panel will review these and other essential matters:

  • Bankruptcy and non-bankruptcy options for distressed schools
  • Regulatory and legal obligations unique to educational institutions
  • Dealing with the board of directors
  • Tactics for obtaining creditor cooperation


Crawford, David
David Crawford

McCormick Theological Seminary

Mr. Crawford is an ordained ruling elder in the Presbyterian Church (USA), and has served on the boards of McCormick,...  |  Read More

Prager, David
David W. Prager, CFA
Managing Director
Duff & Phelps

Mr. Prager is a managing director in the Disputes Consulting practice of Duff & Phelps. He has over two decades of...  |  Read More

Rose, Jack
Jack J. Rose

Rosenberg & Estis

Mr. Rose leads the firm’s Reorganization & Bankruptcy Department. He has three decades of experience in...  |  Read More

Rosenfeld, Robert
Robert S. Rosenfeld, CPA, CFE

Managing Director
RSR Consulting

Mr. Rosenfeld has been a hands-on strategic advisor on financial and operational issues in the corporate restructuring...  |  Read More

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