Thread regarding Education Management Corporation layoffs

The creditors got to add 2 people to the board of directors. The bad news is that will do nothing to change management. In a perfect world a board of directors is a group of professionals who guides the company into the best direction for long term outcome. Unfortunately, that is not how it really works. In corporate America, most of these boards are stacked with close friends of the CEO who put them into place. It's a really cushy job too. Show up once a month for a meeting and collect 80,000 as a member. This is why some people can be on several board of directors at the same time and still have lots of free time to play golf. This is also why some boards even have celebs or spouses on them. This is how all the banks got into trouble, there was no one on the board who was willing to vote no or raise a red flag to whatever the CEO or top management wanted. You scratch my back, I scratch yours. It's a banana republic in suites. 2 extra seats on the EDMC board will not have power to do anything except monitor their decision. But they cant veto or stop them. And from the looks of it, these board members seem like they are in bed with each other, in some cases literally.

Can anyone explain how this works and what's in it for the creditors? I've looked at this thing from several perspectives and I keep coming back to the idea that the creditors, instead of getting the interest and the principle back, are going to forgive the interest and the principle in exchange for 90% of the business, which may or may not just barely be the value of the principle. So how does KKR et al come out ahead, here? Especially because it looks like they are going to proceed with business as usual, at least over the next year or so. Oh, and will they leave the management team in place, the same management team that has already amply demonstrated that about all it can do is drive the company off a cliff? I imagine there will be some change in the make-up of the Board, but this is a board that has largely allowed management to screw this up. Why not, as the creditor, if your intention is to control the recovery of some of your potentially lost investment, simply push the company into bankruptcy, sell off the brand names, the licenses and the accreditations for as much as you can get. No, I don't see the company surviving in anything that looks like its current state. But, maybe there's something bigger going on here that I can't see and don't understand.

"part of our plan to transform the company" Ed West CEO ----- What exactly does that mean? Can't be good, if it was it would have been done already.

Camden- No where does it suggest that EDMC must sell assets.

No one wants the school to close? Uh, yes they do: https://www.youtube.com/watch?v=SU29jTJC7BI

That is the EDMC press release! They are only going to paint a good picture. Lets here from KKR and the others that will put it in real terms with NO Spin, just the facts.

Most of the people on here want it to close. Cammy for example does. And if you read the press release EDMC gave up shares with no voting rights. The EDMC board is still in control. Not KKR or any other bondholder

no one wants the schools to close.

@Anonymous30965, where does it say that EDMC maintains full control of its assets? Do you mean like EDMC previously had control and that Goldman Sachs didn't pressure their decisions? Again, the devil is in the details which workers won't know about for awhile. That doesn't mean their jobs are secure.

Considering that EDMC maintains full control of assets, it's safe to say that EDMC will not be closing. This is of no surprise to the educated ones among us. But certainly a devastating blow to all of the haters who wanted the school to close.

West says campuses and programs will remain open but he does not say for how long. Shareholders will lose almost everything. Does this mean Goldman Sachs is essentially bailing out of this failing company?

Here's the full SEC document...http://archive.fast-edgar.com//20140827/AD227222Z22G62Z22223223ZVUM6RZT2A262/

Looks like KKR asset strippers are officially in charge.