ChinaCast Education (f/k/a ChinaCast Communications and Great Wall Acquisition) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, case number 16-13121.
The Company, which was in the business of providing college-level education to students in China, is represented by Tracy L. Klestadt of Klestadt Winters Jureller Southard & Stevens. ChinaCast Education’s stock previously traded on NASDAQ and then OTC until June 2015, when the SEC revoked its registration.
According to documents filed with the Court, “As a result of Chan’s looting of Chinacast in 2012 described in greater detail below, the Debtor was left in financial ruin, has no current operations, and is winding up its affairs….In March 2012, the Board of Directors of ChinaCast removed Chan from his role as Chairman and CEO when it learned that Chan was attempting to thwart an annual audit.”
Court-filed documents continue, “On June 12, 2012, the Company disclosed that it had confirmed the wrongful withdrawal of funds from Company accounts and further disclosed that it had come to believe that Chan and others may have transferred control of the Company’s interests in certain of the schools operated by ChinaCast without authorization.”
In addition, “Prior to the Petition Date, the Debtor commenced seven (7) actions (the ‘Recovery Actions’) that are currently pending in the United States and in Hong Kong. Under the protection of the Bankruptcy Code, the Debtor intends to maximize the value of its enterprise by continuing to wind-up its affairs, including, without limitation, the continued pursuit of the Recovery Actions without the distraction and substantial costs of having to defend against the Class Action. The Debtor expects to promptly file a Chapter 11 plan that establishes a litigation trust, which will then continue pursuit of the Recovery Actions until completed.”
ChinaCast Education’s Chapter 11 petition indicated assets of $500 million to $1 billion.
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