In an interesting stroke of "justice," it appears that Charlotte School of Law is reaching a settlement with its former students:
The school and student plaintiffs on Tuesday asked a federal judge in North Carolina to preliminarily approve the class and the settlement, saying it was the best deal the students could hope to achieve given the dire financial circumstances of the shuttered school and its parent company, InfiLaw Corp. Judge Graham Mullen of the U.S. District Court for the Western District of North Carolina granted preliminary approval Wednesday.
Should it move forward, the class-action settlement would end four federal suits and 90 state court suits targeting the school.
Charlotte School of Law ran a net $8 million deficit in 2017, the year it closed, according to the settlement motion. InfiLaw lost more than $7 million in 2017 and $6 million through June 2018, the motion said. The settlement consists of the $2.5 million left from the school’s insurance policy, as well as an additional $150,000 directly from InfiLaw.
As it should be. Anyone who honestly thought InfiLaw and its affiliated schools were anything but a cynical cash grab should have their heads and consciences examined. This is at least a pyrrhic victory for these students, compared to prior suits against schools where the student plaintiffs were essentially told they were "sophisticated consumers" and "should have known" the Law School Cartel was peddling pipe dreams. Better to settle rather than have "bad law" on the books showing that the student-loan conduits might have an actual case, at least from the Cartel perspective.
This from the school that blamed its own students and told them that "It is on with these f***ing morther****ers" to pass the bar, dammit, while the dean continued to obfuscate and misdirect. These paragons of legal virtue certainly deserve what they have coming.
Hopefully these payments, while not making students whole by any means, doesn't interfere with getting a student loan discharge from the DOL given that the school is closing. Make sure you read the fine print, and run away now. Go pursue something that is actually worth your time and effort.
Should the usual pattern of class actions hold true, much if not most of the money will wind up in the hands of lawyers who were smart enough not to attend an Infilaw school. Given the sheer number of pending lawsuits there may be, in the words of Abraham Lincoln, too many pigs for the tits.
ReplyDeleteCharlotte was more than happy to take the student's federal loans on the front-end...then, once the bastards weren't performing, well, it's....all the student's fault!!!! It's YOUR fault that WE look bad...!!!
ReplyDeleteYou reap what you sow, even in academia. Maybe the administrators can go get government agency jobs next, where blaming others for one's own misguided actions is both encouraged and rewarded. Sounds like they have the perfect skill set.
$2.5 million is barely $1000 each for the 2500 or so possible class members, and that is if the plaintiffs' lawyers are working for free (unlikely). And it's coming from an insurance policy. Evidently the plaintiffs are not able to reach up, beyond Infilaw, to the private equity partners and investors who had undoubtedly created a legally bullet-proof shield around themselves against downside risk should the law school "consortium" venture fail.
ReplyDeleteNote it's a one-way shield. Yearly, Federal loan money flows in via the students through CSL, through InfiLaw, up though other entities, to the investors and the partners, but none of that money will ever go back out again because all of the intervening entities are legally separate entities.
Nothing illegal about this; if I were an investor in one of the funds, I would expect nothing less, and no losses beyond my original investment (which would be partially offset on my own account by profits in earlier years, which the lawsuits cannot now touch).
It's terrible to say, but I suspect that the former students, no matter how much/little actual cash the get, will do what most gamblers do: give it back to the house. Rather than actually gambling, which provides, however remote, a chance to win, the students will find some other bottom feeding school at which to blow the money.
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