Update: January 30th ITT Bankruptcy Hearing

On Monday, January 30, the judge in ITT’s bankruptcy granted former ITT students’ request that they be recognized as having filed a group claim despite the trustee’s objection, and recognized the Legal Services Center of Harvard Law School as students’ counsel for this initial stage of their case. Former ITT students requested this group recognition as part of their initial filing on January 3. Although the trustee for ITT’s estate filed a vigorous objection to the former students’ request, Judge Carr agreed with the former students that it was unquestionably appropriate to permit former students to file their claims as a group, rather than individually.  The judge ordered the trustee to meet with the students’ lawyers to begin discussing the issue of class certification in students’ adversary proceeding against ITT’s estate.

The judge also denied—for now—the trustee’s motion to hire a company as a “master servicer,” to supervise ongoing collections by UAS and FirstSource, and to begin collecting on more accounts. Former students objected to this request, arguing that, by undertaking a broad new debt collection campaign on fraudulently-incurred and otherwise poorly-documented debts, the trustee would confuse former students and expose ITT’s estate to liability for collecting bad debts. The Trustee disclosed that the Consumer Financial Protection Bureau had also warned that collecting on ITT’s accounts was likely to cause future legal problems, and acknowledged that many of the accounts were likely not collectible. The trustee argued that the estate should nonetheless be allowed to hire the firm as master servicer, but Judge Carr denied the request for now, ordering the lawyers for the trustee to meet with lawyers for former students to discuss their positions on continuing debt collection against former ITT students.

The court scheduled a status conference with former students and the Trustee on February 9 to discuss both of these topics.

For more information about students’ claims against ITT, click here.

New York Times Calls Former ITT Students’ Legal Action ‘Gratifying’

“It seems only right that victims of predatory for-profit education companies should have their student loans forgiven,” the article begins. It goes on to discuss the validity of students’ claims, their difficulty in getting debt relief, and the thousand of pages of “powerful testimony” submitted with the students’ complaint. As the article explains, the evidence shows “a pattern of practice that dispels any notion that bad behavior harmed just a handful of ITT students.”

Read the full article: Student Victims Seek to Become Creditors in ITT Bankruptcy

Class of Former ITT Students File 7.3 Billion Dollar Claim in ITT Bankruptcy

On January 3, 2017, a group of former ITT Tech students moved to intervene in ITT’s bankruptcy proceedings in the Southern District of Indiana. They seek to act as representatives of hundreds of thousands who have been defrauded by ITT.

Along with legal documents, the students filed over a thousand pages of first-hand accounts from students who attended ITT, affidavits from several whistleblowers, and evidence developed from state and federal law enforcement investigations. The CFPB and multiple state attorneys general are also parties in the bankruptcy proceedings.

For more information on the student intervention, including all of the documents that were filed, background on ITT, and explanations of the legal actions taken today, click here.