53 Pages Posted: 28 Feb 2016 Last revised: 12 Mar 2017
Date Written: March 10, 2017
Many colleges and universities are in financial distress but lack an essential tool for responding to financial distress used by for-profit businesses: bankruptcy reorganization. This Article makes two primary contributions to the nascent literature on college bankruptcies by, first, unpacking the differences among the three primary governance structures of institutions of higher education, and, second, by considering the implications of those differences for determining whether and under what circumstances institutions of higher education should be allowed to reorganize in bankruptcy. This Article concludes that bankruptcy reorganization is the most necessary for for-profit colleges and least necessary for public colleges, but ultimately concludes that all colleges be allowed to reorganize in chapter 11.
Keywords: bankruptcy, higher education, chapter 11, chapter 9, reorganization, for-profit colleges, forprofit, nonprofit, private colleges, public colleges, reorganization, higher education, university
JEL Classification: G33
Suggested Citation: Suggested Citation