The College of New Rochelle, New York.
The College of New Rochelle (“CNR”) was a non-profit, undergraduate, and graduate liberal arts college founded in 1898. The school was well known for its nursing program and served the needs of over 90,000 students. More recently, the school prided itself on serving underprivileged and first-generation college students at its New Rochelle, New York main campus plus five satellite campuses throughout New York City’s boroughs. Over the last two decades, the student population shrank from about 8,000 to 3,000 full-time students.
CNR responded to extremely difficult financial challenges when it discovered financial malfeasance. The Board of Trustees initially learned that CNR failed to pay federal, state, and local payroll taxes for two years. Subsequent investigations turned up additional misconduct, including, but not limited to:
- Concealing CNR’s true financial situation
- Issuing false financial information
- Unauthorized use of endowment funds
At that time, the Board of Trustees formed a Special Committee to investigate further. Despite significant efforts by CNR, the financial challenge was ultimately insurmountable. A search for primary and secondary wind-down partners was successful. A Teach-Out Agreement was signed with Mercy College, and an Agreement of Mutual Cooperation followed shortly thereafter.
CNR engaged Getzler Henrich as Chief Restructuring Officer to guide the educational wind down and maximize recoveries for creditors. Our primary responsibilities included opening an improved line of communication with CNR’s bondholders and lenders, oversight over the wind down of educational operations, oversight over the transition of the student population and critical support services to Mercy College, filing Chapter 11 after all educational operations were terminated, and monetizing the assets for the benefit of creditors.