Treatment Abuse, Behavior Modification, Thought Reform > CEDU / Brown Schools and derivatives / clones
Brown Schools History
Anonymous:
Right on Antigen!
I have learned so much from you, and others here!
Deborah:
http://www.statesman.com/business/conte ... brown.html
Brown Schools Inc. files for bankruptcy
Austin-based operator of schools for troubled youths has been targeted by regulators and private lawsuits.
By Robert Elder
AMERICAN-STATESMAN STAFF
Tuesday, March 29, 2005
The Brown Schools Inc., an Austin-based operator of schools for troubled youths whose methods have been repeatedly targeted by state regulators and private lawsuits, filed for Chapter 7 liquidation in Bankruptcy Court in Delaware.
The filing Friday lists at least $425,000 in legal settlements among its unsecured claims.
Five of the six settlements listed are for Austin-area residents, according to the bankruptcy filing. Most of the lawyers handling the settlements couldn't be reached for comment late Monday.
Brown Schools didn't say why it filed for liquidation. It operates 11 boarding schools and educational facilities for troubled children in Texas, Idaho, California, Florida and Vermont, according to its Web site.
The schools were the subject of a series of Austin American-Statesman stories in 2003, which detailed the use of improper physical restraints at the centers and other questionable techniques and lax regulation by state authorities.
Texas regulators cited the On Track program of the Brown Schools for multiple violations after the 2002 death of 17-year-old Chase Moody of Richardson. Regulators alleged that an improper restraint was used at the Mason County program, although a grand jury later concluded that no criminal charges were warranted.
Brown Schools filed for liquidation along with 24 affiliates. It reported assets of less than $10 million and debt between $10 million and $50 million.
Winstead, Sechrest & Minick, a Dallas-based law firm with a major office in Austin, is listed as the third-largest unsecured creditor. The firm is owed $324,496, according to the filing.
Shareholder Bill Sechrest didn't return a phone call for comment. The firm had served as general counsel for Brown Schools.
The filing lists claims by numerous other lawyers, including prominent Austin litigator Roy Minton ($55,995) and the Austin office of Fulbright & Jaworski ($23,713).
The company listed food services vendor Aramark Management Services Ltd. as its largest unsecured creditor, with a claim of $1.5 million.
The filing doesn't say who currently owns the Brown Schools. Until recently, Menlo Park, Calif., investment firm McCown, De Leeuw & Co. owned Brown Schools and its unit, CEDU School Inc.
Brown Schools scaled back in 2003, selling six in-patient facilities to Psychiatric Solutions Inc., based in Franklin, Tenn., for $63 million.
The six facilities, which had a total of 895 beds, included units Austin, San Marcos and San Antonio.
The sale price was seen as a sign of distress for the Brown Schools because the six facilities brought in revenue estimated at $76 million a year.
Anonymous:
http://www.findarticles.com/p/articles/ ... i_77814756
The Brown Schools Announces New Company Officers
Business Wire, Sept 4, 2001
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Business Editors/Education Writers
NASHVILLE, Tenn.--(BUSINESS WIRE)--Sept. 4, 2001
The Brown Schools, the nation's largest provider of education and treatment services for young people, today announced new company officers.
Marguerite Sallee has been named president and chief executive officer of The Brown Schools. Tom Riley, the company's previous chairman and chief executive officer, will continue as a director of the company, and George McCown will become chairman of the board.
McCown is chairman and managing director of McCown De Leeuw & Co. (MDC), a private investment firm whose mission is to build companies that make a difference. MDC is The Brown Schools' principal shareholder.
"I look forward to working with Marguerite and Tom to solidify The Brown Schools' position as the leading company providing services to solve the complex problems that young people face and further our reputation as the thought leader and standard-setter in our industry. MDC has a history of investing in growth companies like The Brown Schools. With her background in education and youth services and her experience building growth companies, Marguerite Sallee is the right person to lead the company forward," said McCown.
Sallee has held chief executive positions in both government and business sectors and has been involved in education and youth services throughout her career. From 1980 to 1984, Sallee spearheaded Tennessee's four-year Healthy Children's Initiative. Sallee later served in Tennessee Governor Lamar Alexander's cabinet as Commissioner of the Department of Human Services, where she was responsible for the State's child care, foster care and child welfare programs.
In 1987, Sallee founded and served as chief executive officer of CorporateFamily Solutions, a national employer-sponsored child care company she took public in 1997. She became chief executive officer of Bright Horizons Family Solutions (NASDAQ: BFAM) when her company and Bright Horizons merged in 1998 to form an international company serving over 300 of the world's leading employers. Most recently, she served as chairman and chief executive officer of Frontline Group, a global performance improvement and e-learning company.
"I believe that the best business opportunities exist when real needs are being met. I am looking forward to exploring new opportunities for growth and financial success for The Brown Schools as we continue to fulfill our important mission. I am gratified to be working with our investors as they support us in our efforts to make a difference in the lives of vulnerable young people," said Marguerite Sallee.
About The Brown Schools
Founded by Bert Brown in 1940, The Brown Schools is the largest national provider of education and treatment services for young people. The privately held company serves approximately 1,500 young people daily at 36 locations in 11 states and Puerto Rico, offering a broad spectrum of care including residential treatment centers, alternative education programs, therapeutic wilderness programs and emotional growth boarding schools. In 1998, The Brown Schools acquired The CEDU Family of Services, a pre-eminent provider of college preparatory education and emotional growth programs founded in 1967 by Mel Wasserman. MDC provided most of the new equity utilized to effect the transaction.
COPYRIGHT 2001 Business Wire
COPYRIGHT 2001 Gale Group
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Anonymous:
This has (arguably) no bearing on the three questions:
1. Why did Brown Schools buy CEDU?
2. Why did McCown De Leeuw (normally regarded as VERY sharp investors) invest in Brown Schools -- if CEDU was that overpriced. That'd be easy to verify and quantify
3. Why did George McCown take an active management position in Brown Schools? (He rarely does that).
Hypothesis: one of McCown's grandchildren was at a CEDU school & did well (or possibly, child).
Deborah:
http://www.statesman.com/business/conte ... BROWN.html
Brown Schools' bankruptcy filing puts lawsuit settlements in jeopardy
Plaintiff says company pressed for settlements, raises question of bad-faith negotiating.
DEATH BY RESTRAINT
Texas lacks a tough law on prone restraint method that's banned in three states. Read more about it in our special report, Death by Restraint. MORE ON THIS STORY
Brown Schools Inc. files for bankruptcy
The Brown Schools bankruptcy petition
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By Robert Elder Jr.
AMERICAN-STATESMAN STAFF
Friday, April 01, 2005
In recent months, three Austin lawyers say, Brown Schools Inc. offered to settle claims by their clients for everything from sexual abuse by its employees to deceptive business practices.
But there was a catch, according to the lawyers: Brown Schools said the plaintiffs had to accept less money and delayed payments so that the Austin-based company, which operates facilities for troubled children, could avoid bankruptcy, a filing that would likely have left the families with nothing.
On March 25, Brown Schools filed for Chapter 7 liquidation in Bankruptcy Court, jeopardizing all of the payments. Most of the company's facilities have closed, putting 700 employees out of work.
The mother of one plaintiff, Donna Bowen, said company officials, including comptroller Brian Havel, told her just weeks before the filing that the company could start paying her settlement in September. A lawyer representing two other plaintiffs said his clients were promised money in April. Another lawyer said his client was told payment would start next January.
"My feelings are they certainly negotiated in bad faith," said Bowen, an Austin lawyer who agreed to a $30,000 settlement in February with the Rocky Mountain Academy, a Brown Schools facility in Idaho, on behalf of her son.
Bowen's case is among at least six in which Brown Schools agreed to pay a total of more than $500,000, according to interviews with lawyers and court records.
Bowen said Wednesday that her case had been set for trial in February in District Court in Travis County on her claim that Brown Schools improperly expelled her son in late 1999.
After she agreed to mediate instead, Bowen said Brown Schools officials told her in February the company would start payments in September. "They said there wasn't enough money right now, but in the fourth quarter, they'd have the resources," she said.
Based on the quick bankruptcy filing, Bowen said it now appears to her that "they knew at that time that they never intended to make payment."
Havel declined to comment on Bowen's comments or any aspect of the bankruptcy or litigation.
Steve Mierl, an Austin lawyer who has represented Brown Schools in several cases including Bowen's suit, said he has "no personal knowledge" of the company using the threat of bankruptcy to extract lower settlements.
"I won't say it didn't happen, but I don't personally know of any situation where it did," Mierl said. "Any dealings I had with them as far as talking to plaintiffs . . . were done in good faith."
The chairman of Brown Schools, Fenton "Pete" Talbott, did not return calls seeking comment. Talbott was named CEO as well as chairman on March 21 ? just four days before the bankruptcy filing ? by McCown, DeLeeuw & Co., a Menlo Park, Calif., investment firm that was the majority owner of Brown Schools.
In a March 21 letter to parents at a Brown school in Idaho, George McCown, a member of the schools' board of directors, praised Talbott as "the ideal individual to lead the company."
The settlements are among millions of dollars in unsecured claims Brown Schools listed in its filing. The company reported assets of less than $10 million and debts of $10 million to $50 million.
Unsecured claims are paid after secured claims, which typically are bank loans and other financing guaranteed by the company's assets. That makes recovery of other claims a long shot.
Two other lawyers said Brown Schools agreed to settlements but required postponed payment schedules, contending that was the only way the money would be assured.
"If you went to trial and hit them for a big judgment," company officials and their lawyers "made it clear to me they would file for bankruptcy," said Chris Elliott, a partner at Ivy, Crews & Elliott who represents a woman who alleges a Brown Schools counselor assaulted her in 2002, when she was 16.
"We were cognizant" of the company's financial problems, Elliott said. "At that point, you have to do what you can for your client."
Elliott said that Brown Schools had agreed to start paying his client in January, although the amount had not been finalized.
Brown Schools hired numerous law firms to defend itself against claims. Its general counsel, Dallas-based Winstead Sechrest & Minick, said last month it withdrew because the company hadn't paid the firm.
Joey Mooring, a spokesman for Winstead Sechrest, said the firm would not comment on its work for Brown Schools.
John Thomas, who represents two families that settled sexual assault claims against Brown Schools, said his clients "gave up their day in court based on a promise they would be paid something to help get their lives back together."
"At this point, we have serious doubts about whether the Brown Schools ever intended honor that promise."
Thomas, a partner at George & Brothers LLP, said the company early this year promised to start monthly payments in April to both clients. Both cases involve alleged sexual assaults by Edward Jared Johnson, a former staff member at the Brown Schools' Austin facility.
Based on a criminal complaint by one of the girls, Johnson pleaded guilty in 2003 to indecency with a child and sexual contact. He received a 54-month state prison sentence.
The bankruptcy filing could be the final chapter for Brown Schools, which was founded in 1940 in San Marcos. Over the decades, Brown Schools facilities served as a training ground for generations of social service workers in Texas.
"This is a relationship-based program, and they closed this like it was a factory," a counselor at one of the schools told the Spokesman-Review newspaper in Spokane, Wash.
Brown Schools operates 11 boarding schools and educational facilities in Idaho, Texas, Vermont, Florida and California, according to its Web site. Facilities in Austin and San Marcos were sold to Psychiatric Solutions Inc. in 2003.
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