Boston, MA 08/26/2014 (wallstreetpr) – Corinthian Colleges Inc (NASDAQ:COCO) is having a hard time to get the much-needed government support for student loans in the absence of which its going concern value will remain in question. In the latest news, it has said that the federal regulator has imposed restrictions on sales of its loan assets. Corinthian said that it is seeking an impairment charge of around $55 million to $59 million on the assets.
The issue
Corinthian Colleges Inc (NASDAQ:COCO) entered into a deal transaction with an unspecified buyer in which it sold the loan assets of worth $19 million. The deal transaction took place on August 20, 2014. Following the next day, the company attorneys met the CFBP lawyers as it was alleged of violating the consumer laws. As per the CFPB, it has violated the Fair Debt Collections Practices Act and the Dodd-Frank Act.
Corinthian has got the deadline of August 29, 2014 for sending its respond on the matter to the CFBP. Also, if it wants to opt for settlement talks, it has to stop the sales or transfers of the private student loans. It has to provide with the relevant information on the future asset sales to the CFPB. Importantly, it has to inform the students about any change of status in its campuses.
The ongoing problems
Corinthian Colleges Inc (NASDAQ:COCO) has agreed to sell or close its 107 campuses under a proposed government plan. It is believed that it has provided misleading information on the job placement to the students. It is also alleged of misleading the investors over its finances. As part of ongoing investigations, it had to face a ban of 21-day waiting period imposed by the Education Department. The ban created the liquidity problem for the company. Corinthian will report its earnings on August 25, 2014. The analysts expect the revenues to come at $337.42 million and EPS to come at $0.11 per share.
