Thread regarding Education Management Corporation layoffs

It is very possible, additionally, a distressed bankruptcy filing could also potentially trigger accreditation criteria defaults. like I had stated earlier, this is an interesting gambit to watch play out.....

Is it possible, if the equity for debt swap deal fails, EDMC could be pushed into bankruptcy next summer (when some of the notes become due)? Bankruptcy=suspension of Title IV disbursements = no payroll= put the locks on the doors.

Education Management Corporation ("EDMC" and together with its consolidated subsidiaries, the "Company") announced today that it has extended until 5:00 p.m., New York City time, on December 1, 2014 the expiration date (such date and time, as the same may be further extended, the "New Expiration Date") for its previously announced private offer to exchange (the "Exchange Offer") all outstanding Senior Cash Pay/PIK Notes due 2018 and Senior PIK Toggle Notes due 2018 issued by certain of its subsidiaries (collectively, the "Notes") for a combination of mandatory convertible preferred stock of EDMC and warrants to purchase common stock of EDMC. The Exchange Offer is being conducted in furtherance of the Company's previously announced financial restructuring (the "Restructuring"). The expiration date for the Exchange Offer had previously been 11:59 p.m., New York City time, on November 24, 2014 (having been extended pursuant to a press release issued on October 30, 2014).

draw another line in the sand....

Camden, you cannot blame EDMC for the a pension fund losing out because they invested in EDMC. Pension funds are notorious for diversifying their securities. Being listed on the NASDAQ and also receiving government funding puts them high on the list for disclosing a lot of facts and it's plain as day that they were still invested back in March of this year when the stock was probably still up near $10. Regardless, if they couldn't see that the bottom was dropping out even 24 months ago shame on them or their asset manager.

Bad as it might seem, that is the differance between stocks and bonds...with a bond, you are supposed to be repaid the principal. with stock you have the opportunity for capital appreciation, dividends (if declared. Not every stock is a winner, that is why investment professionals stress diversification.

Lots of people lose out in this matter.... The students, who have essentially leveraged their financial futures for worthless degrees, former employees who have lost jobs, associated business partners who ramped up to support the steep growth curve only to have to throttle back the effort... The burden of Student loan debt will hamper the former student's futures and will have an impact in reducing consumer demand for other goods and services because they cannot be afforded.

It's not pretty, it is reality, this is just indicative of our next "Big Bubble" to burst, like the .Coms' and Real Estate Bubbles that burst in the past.

People really need to watch and pay attention to the world around them and try to make good informed decisions...

@Anonymous49358, meanwhile, stockholders like the Ontario Teachers Pension Program lost tens of millions over the last year by holding onto EDMC.....http://www.holdingschannel.com/hedge-funds/holding-edmc/?page=8&type=

There is significant "squeeze play" going on with the debt restructuring holdup being employeed by margate et al.... ( minor debt holders). If the Debt for equity (about $1.1 billion debt) restructuring cannot be completed before the new gainful employment reg's come into effect mid 2015 and title 4 funding is reduced. the "juice" on the $1.1 billion debt will be crushing... Better to renegiotiate a deal with the minor debt holders and give them a bigger peice of "cheese" , convert the remaining debt to equity than to sink the entire ship.

@Anonymous49233, as others have said, it's often about "business" and the lives of business insiders. Some of this makes no sense from the outside, because it may not just be about the specific situation, but about larger or more personal issues. I'm not sure how many people in the higher echelons care about students or workers. Goldman Sachs has had a large part in destroying your company. They are the largest villains in this drama. Excluding KKR, the other debt holders are minor players.

If you are holding a debt instrument of a distressed organization and you squeeze too hard, the distressed entity could fold and you would be left holding essentially worthless paper (pending any covenants or guarantees of that debt instrument. this is a business matter not an educational matter.

Camden - does this mean they are after edmc to shut them down for good? What happens to all the students?

...because it's just all about the kids

If you're a distressed debt investor, you got to play "hardball" to make a profit... go get 'em.. Let's see how this plays out.