Career Education Corporation announced that it will begin a gradual process of discontinuing the operations of its Le Cordon Bleu North America colleges of culinary arts. Le Cordon Bleu will no longer enroll new students after the January 2016 student cohort begins classes. The Company also announced that it has extended its credit agreement with its lender.
TEACH-OUT OF LE CORDON BLEU
Career Education had previously been engaged in advanced negotiations with a potential buyer interested in acquiring all of the Company’s Le Cordon Bleu campuses. These discussions, and discussions with alternative parties, did not lead to an agreement the Company felt was suitable to complete a transfer of ownership that would protect student, faculty and stockholder interests. The decision to teach out the Le Cordon Bleu campuses is aligned with the Company’s strategic decision to divest or teach-out the remaining institutions of its former Career Colleges segment, which was previously announced in May 2015. As part of a “teach-out,” students making reasonable academic progress will have the opportunity to complete their program. All Le Cordon Bleu campuses are projected to remain open until September 2017.
“New federal regulations make it difficult to project the future for career schools that have higher operating costs, such as culinary schools that require expensive commercial kitchens and ongoing food costs,” said Todd Nelson, president and CEO of Career Education. “Despite our best efforts to find a new caretaker for these well-renowned culinary colleges, we could not reach an agreement that we believe was in the best interests of both our students and our stockholders.”
Le Cordon Bleu North America offers hands-on educational programs in culinary arts, as well as patisserie and baking, to students at 16 campuses located in cities across the United States.