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Dream Center Receivership

In January of 2019, Dream Center Education Holdings (DCEH) and the schools that it owned and operated (including the Art Institute Schools, Argosy, and others) went into receivership in the Northern District of Ohio. Student Defense is representing several groups of students in the Receivership who were harmed by the collapse of the Dream Center and its affiliated schools. The Receivership court has granted our motions to intervene on behalf of three distinct groups of students:

1. Victims of accreditation deception in Illinois (the Dunagan case), the attempted Bar Order, and the students’ successful Sixth Circuit appeal to preserve their lawsuit in Illinois

On December 8, 2018, former Illinois Institute of Art students Emmanuel Dunagan, Jessica Muscari, Robert J. Infusino, and Stephanie Porreca filed a class action lawsuit in Illinois state court against the Dream Center Foundation, DCEH (the Foundation’s wholly owned holding company), and their school, the Illinois Institute of Art. The students—represented in Illinois by Student Defense and Edelman Combs Latturner & Goodwin, LLC—allege that the Defendants misrepresented and concealed the fact that the school lost accreditation, while encouraging students for more than half a year to continue paying for courses and even graduate with unaccredited degrees. More information about the Illinois case is available here

In 2019, the Defendants removed the Dunagan case to federal court in the Northern District of Illinois, where it was originally before Judge Charles Norgle and, following his retirement, was reassigned to Judge Joan Lefkow. In 2021, Keishana Mahone and Lakesha Howard-Williams joined the case as new plaintiffs, and former top-level DCEH officers Brent Richardson, Chris Richardson, and Shelly Murphy were added as defendants in their personal capacity. 

After the Receivership began, the Illinois case was stayed against DCEH and the Illinois Institute of Art, but it continued against the Dream Center Foundation and individual defendants Brent Richardson, Chris Richardson and Shelly Murphy.

In February 2019, the Dunagan plaintiffs moved to intervene in the Receivership in order to protect their interests and those of the proposed class in their Illinois lawsuit. The students are represented in the Receivership by Student Defense and Squire Patton Boggs. Since 2019, the students have fought tirelessly to protect their interests, including by filing a motion to vacate the Receivership.  

In June of 2019, the New York Times published an article describing the Receivership and controversy surrounding the Receiver’s bills. 

In February 2021, the Receiver announced that, after three years, he had reached a “global settlement” of his claims with the Dream Center Foundation and a large group of former officers and directors of the Dream Center entities, including Brent Richardson, Chris Richardson, and Shelly Murphy, the defendants in the Illinois case. The proposed settlement was conditioned on the Court also entering an order that barred the Dunagan plaintiffs from continuing their lawsuit in Illinois. The Dunagan plaintiffs objected to the bar order. The Ohio court held a hearing on the bar order on August 24, 2021 (transcript here) and, on October 20, 2021, entered an order approving the settlement and bar order

The students immediately appealed the bar order to the Sixth Circuit Court of Appeals: 

  • The students’ appellate brief is available here
  • The Receiver’s opposition brief is available here.
  • The students’ reply brief is available here

Oral argument was held on July 19, 2022. The students were represented on appeal by Gupta Wessler and Student Defense. 

On February 7, 2023, the Sixth Circuit ruled in favor of the students, striking down the bar order and remanding the case to the District Court. Following the students’ appellate victory, the Illinois case reopened and is proceeding in discovery. 

As of June 2023, the Receivership remains ongoing. 

2. Students missing federal stipend funds

Thousands of students attending Dream Center schools including Argosy University, the Art Institutes, and Western States College of Law did not receive approximately $16 million in federal student aid living stipends that should have been disbursed in early 2019. Student Defense moved to intervene on these students' behalf, as many suffered significant hardship including eviction due to the missing funds.

In April 2019, these students filed a motion for expedited discovery to determine the whereabouts of the missing student stipends. To date, there is still no information regarding what happened to the funds. 

Student Defense Vice President Alex Elson was quoted in the New York Times regarding the missing stipends: “Seeking $2.1 Million After College Chain’s Collapse (to Repay Its Guardian, Not Students)

3. Psychology students whose records were destroyed

Students pursuing graduate degrees at Argosy University’s Georgia School of Professional Psychology discovered that their files had been shredded, leaving them unable to transfer to other degree-granting institutions, to secure internships, or to get licensed. Student Defense filed a motion to intervene on behalf of a group of students, seeking to find ways to ameliorate the damage. The motion to intervene is available here.