ITT Educational Services files for bankruptcy to start liquidation
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By Jim Christie
SAN FRANCISCO (Reuters) - ITT Educational Services Inc filed for bankruptcy on Friday to liquidate its business after the U.S. government restricted financial aid to new students of the U.S. for-profit college operator.
The filing follows ITT's decision earlier this month to shut its 137 technical college campuses in 39 states, a move affecting about 35,000 students and 8,000 employees.
Reuters on Thursday reported ITT had hired restructuring consultants Alvarez & Marsal LLC and bankruptcy law firm Faegre Baker Daniels LLP to prepare the filing.
The U.S. Department of Education in August banned ITT from enrolling new students who receive federal aid, a critical source of revenue for the Carmel, Indiana-based company.
ITT had been under government scrutiny over allegations of fraud and deceptive marketing tactics amid a push by the U.S. government to enforce tighter rules on the for-profit education sector.
Corinthian Colleges Inc last filed for bankruptcy, abruptly closing 28 schools and leaving 16,000 students without classes amid federal and state investigations.
In its voluntary Chapter 7 bankruptcy petition in U.S. Bankruptcy Court in Indianapolis, ITT listed assets and liabilities each between $100 million and $500 million.
The case is In re ITT Education Services Inc, 16-07207, U.S. Bankruptcy Court, Southern District of Indiana.
(Reporting by Jim Christie)
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