ITT Educational Services and subsidiaries file Chapter 7 bankruptcy

By Caroline Salls

Pittsburgh, Sept. 19 – ITT Educational Services, Inc. and its ESI Service Corp. and Daniel Webster College, Inc. subsidiaries ceased operations and made a Chapter 7 bankruptcy filing on Friday in the U.S. Bankruptcy Court for the Southern District of Indiana.

According to an 8-K filed with the Securities and Exchange Commission, the companies’ assets will be liquidated and claims administered in accordance with the Bankruptcy Code.

Deborah J. Caruso has been appointed as the Chapter 7 trustee and will assume control of ITT and the subsidiaries.

ITT said recent previously disclosed events impaired its ability to implement alternatives for the refinancing, restructuring or self-directed orderly liquidation of the company.

According to court documents, ITT has $100 million to $500 million of both assets and debt.

Warburg Pincus Asset Management, Inc. owns 12.4% of the company’s shares, and Nantahala Capital Management, LLC owns 10.8%.

Each of ITT’s directors, including C. David Brown, Jerry M. Cohen, John E. Dean, Joanna T. Lau, Thomas I. Morgan, Samuel L. Odle and Vin Weber, resigned effective upon the filing of the Chapter 7 petition.

In addition, chief executive officer Kevin M. Modany, executive chairman John E. Dean, executive vice president and chief financial officer Rocco F. Tarasi III and president and chief operating officer Eugene W. Feichtner are no longer officers and employees of the company.

ITT Educational Services provided postsecondary degree programs and is based in Carmel, Ind. The Chapter 7 case number is 16-07207.

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