School’s Out Value Preserving Asset Sale Results in Non-Profit Conversion of For-Profit School Systems
A&O advises ad-hoc group of Revolving Lenders on out-of-court restructuring and financing for sale of Education Management Corporation’s higher education university systems to a non-profit foundation.
Education Management Corporation (October 16, 2017)
A&O advised an ad-hoc group of Education Management Corporation’s (EDMC) revolving lenders in connection with the debt restructuring and sale of EDMC’s three primary for profit university systems, Argosy University, South University and The Art Institutes to The Dream Center Foundation, a California not-for-profit foundation (DCF).
The sale and financing were the result of months of restructuring negotiations among DCF, EDMC, its existing revolving lenders and its existing term loan lenders. The successful completion of the deal resulted in significant value preservation for the EDMC creditors, maximizing recoveries through the release of cash collateral previously held to support letters of credit issued for the benefit of the U.S. Department of Education and through other retained assets at EDMC. More importantly, the transaction avoided a precipitous closing of the EDMC schools, allowing nearly one hundred U.S. universities to continue the post-secondary educations of tens of thousands of students.
"A truly fulfilling transaction – we achieved a positive result for our clients, while also benefiting thousands of EDMC students and employees"
Judah Frogel (Partner, NY Leveraged Finance and Restructuring) commented: “EDMC’s restructuring presented one of those rare opportunities where we were able to say that, both professionally and personally, it was a truly fulfilling transaction – we achieved a positive result for our clients, while also benefiting thousands of EDMC students and employees.”
The A&O Team
The New York banking team was led by partner Judah Frogel assisted by associates Caroline Ling, Jason Palios and Zachary Frimet.
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