This just in from Atlanta.
Federal Judge Timothy C. Batten, Sr., has appointed a special receiver to operate the “business” of Mosaica, which, according to the complaint and motion filed by its creditor, Tatonka Capital, has $20 million in unpaid debt and $10 million in operating losses in the last year. The receiver will be responsible for the continued operations of all the charter schools now being run by Mosaica.
This is the riskiness of the charter business. Mosaica is a “for-profit” charter business that is not making a profit and is instead deep in debt.
It is amazing the children are turned over to for-profit corporations for their education.
This is one of the dangers of “reform,” in which the motivating goal is profit, not education.
Diane Ravitch's blog 
Wow. All of them? Mosaica is huge:
http://mosaicaeducation.com/locations/united-states/michigan/
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I don”t think I would call 32 brick and mortar schools (17 in Ohio) huge. It is well under 1% of all charter schools.
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I suppose “huge” is a matter of perspective. I would call 32 schools going under at once with no warning or planning “huge”. It’s not like they’re retail outlets. It was national news when the mayor of Chicago closed 50 schools.
Thank goodness there’s an adult in the room. huh? If it weren’t for the lawsuit and the judge putting in a plan would the schools just not open one morning?
Mosaica was still selling last week. They were one of the management companies hoping to buy the York, Pennsylvania system. The York system voted to stay public, but why are they still bidding on public schools when they haven’t paid their creditors since 2013?
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Chiara,
Correct me if I am wrong here, but aren’t these schools still all open? They are being managed by a court appointed special receiver.
I agree that huge is a matter of perspective. I consider NY Public huge with over 1,700 schools and a $25,000,000,000 annual budget, but it is just a small fraction of the total number of public schools and public school expenditures in the country. Is 32 out of 6,000 charter schools a huge number? I guess I would go with “significan”t rather than “huge”.
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Depends on your perspective TE. If we go by national percentages, no school is huge. But when done by comparison to other school entities, yeah, Mosaica is (was?) pretty big.
I teach in a district that has 15 schools serving 11,000 students. We’re one of the biggest districts in our metropolitan area. Mosaica is triple that. So from that perspective, Mosaica appears pretty big.
See how we both gamed the numbers? Which is how all kinds of education statistics get gamed.
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The system also only works because charters are (mostly) still located in high population areas. There’s a large public school system in place to handle the churn. In a less populated area one large charter school going under would be a huge strain on the public system.
They’re moving aggressively into “outer ring suburbs” and rural areas. and as usual there’s no planning or consideration given to the existing public system and whether that system can handle charter school churn and chaos. The Obama Administration are actually subsidizing the move into outer ring suburbs in Illinois.
I hope the public system can handle these market experiments.because the risk isn’t to just charter school kids, it’s to every kid in the public system. They didn’t “choose” anything. They were simply in a public school at the chosen location of one of the experiments.
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Yeah, no big deal. What’s a few thousand students, more or less? *Shrug*
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Dienne,
I was thinking of poster concerned mom when writing my post. She had gotten the impression that charter chain schools were much more dominant in the charter school population than they actually are. When I think of a huge chain, I might expect it to reach 10% of all schools of its type, but of course the largest chain of charter schools opporates a little under 3% of schools and educates a little under 3% of charter school students.
These schools have not closed, but are still opporating and the students are still attending, right? They are under new management.
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Right, TE, and change of control has never thrown a system completely out of whack. I mean, I’ve gone through four changes of control in my career and loved every one of them. Paying for anti-depressants, antacids and sleep aids has never been a problem – I’m happy to contribute to the economy. And if I can survive it with only moderate to severe anxiety and depression, shouldn’t be a problem at all for resilient young kids, right?
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Dienne,
It is not clear that any individual at any school has been replaced.
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Still waiting to hear from the charter cheerleaders. C’mon, gentlemen – no thoughts on this?
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Many “charter cheerleaders” are strongly opposed to for-profit chartering, so . . .
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If they’re so opposed to it, why haven’t these “charter cheerleaders,” most of whom have huge amounts of money and influence in politics, not pushed for tighter regulations on charters? It does no good to say that they are “opposed to for-profit chartering,” when they allow for-profit groups to make obscene amounts of money in charters? These charter cheerleaders could get all kinds of regulations passed. But they don’t.
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Threatened,
I certainly think reasonable regulations of charter schools should be implemented and have often posted in favor of them.
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$tudent $ucce$$ before students aka a business plan that masquerades as an education model. Who’d a thunk?
😱
But don’t the self-styled “education reformers” always bray that it’s “all about the kids”?
Then again, their most sacred metrics are the numbers associated with ROI/MC [ReturnOnInvesment/MonetizingChildren].
Makes perfect ₵ent¢…
And unlike the leaders of the real civil rights movement, the self-proclaimed leaders of the “new civil rights movement of our time” find that they do “good” by taking it out of us, er, by doing it “good” to us. Whatever…
And the “goodly” amount of pain and suffering and deprivation they are subject to “for the kids”?
[start “education reformer” sacrifice]
The district on Monday also updated details of Deasy’s separation agreement. He’ll receive about $61,000 for unused vacation days in addition to about $70,000 in severance to be available as needed through year’s end.
[end “education reformer” sacrifice]
Link: http://www.latimes.com/local/education/la-me-lausd-cortines-20141021-story.html
After all, remember that all that touchy-feely stuff about democracy and genuine learning and teaching can’t come close to cage busting achievement gap crushing hard data point$:
“What’s the use of happiness? It can’t buy you money.” [Henny Youngman]
😒
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Let me help out Krazy; It is all about the kids. They are worth a certain amount per head to guarantee the roi. Without them the great real estate investments can’t be consummated. Once again, remember, it is about the kid$$$ (per head price like cattle) and their future(for our investment return and opportunities.) For Mosaica and others, they are the (in part) the future! I think I can channel our poet, title About The Kids….coming soon.
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This is from September of this year:
“ATLANTA (CN) – The primary lender for a money-losing chain of charter schools wants a receiver appointed so more than 10,000 students, teachers and staff will not be out in the cold, and classes can continue.
Tatonka Capital Corp. sued Mosaica Education Inc. and six wholly owned subsidiaries on Friday in Federal Court.
Mosaica is in default on $20 million of debt to Tatonka, the Denver-based plaintiff says. Tatonka claims it has first lien on “substantially all of MEI’s operating assets,” and that “a series of bad business decisions” caused Mosaica to lose more than $86 million.
Mosaica has not made a regular payment to Tatonka since July 2013, according to the complaint.
“Tatonka could foreclose, but foreclosure would adversely affect thousands of schoolchildren, teachers, others, and the going concern value of the business,” the complaint states. ”
Two of the six “wholly-owned subsidiaries” are real estate holding companies in Michigan and Ohio, which doesn’t surprise me at all. Those are probably the facilities- the schools- and “Mosaica” (the management entity) then rents from the LLC (the subsidiary) but all the money goes to Mosaica.
http://www.courthousenews.com/2014/09/23/71671.htm
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you will know more about Mosaica schools finances than you ever wanted to know if you wade through all of these exhibits:
https://www.pacermonitor.com/public/case/4651126/Tatonka_Capital_Corporation_v_Mosaica_Education,_Inc_et_al
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Interesting . . . They were also considered at York, PA, but york ultimately turned them down.
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It is clearly a conflict in medicine or education, which each have a service mission, to have a profit motive as well. It is hard to maintain the focus on the goal of positive outcomes for patients or for students, when you are distracted by the bottom line.
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Wonder who escaped with money in their pockets before this hit. One more time the taxpayers, staff and children will be left holding the bag. I say prosecute these criminals!
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This stuff is just wild:
“Corporate-Sponsored Schools
Through Mosaica’s niche service, New Schools for New Communities, we have partnered with corporate sponsors to help develop and manage schools. An example includes Mosaica’s work with X developer in managing Banning Lewis Ranch Academy charter school in Colorado. Our expertise in education allows the sponsoring corporation to focus on its core business competency while assuring that its constituents have access to a quality K-12 educational program.”
I don’t even know what that means. A school for the “constituents” of a corporation? It looks like it’s in planned community (a real estate development) but can corporations actually sponsor charter schools now?
http://mosaicaeducation.com/starting-school/
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This post turns logic upside down. The Mosaica receivership illustrates one of the strengths of charter schools – when they perform poorly, whether educationally or financially, they can be shut down. Public schools are never shut down, no matter how poorly they perform. Over the long term, charter schools should improve as the poor performers are weeded out, a process that cannot apply to public schools. Tighter regulation of charter schools would speed up this process, and I strongly favor improved regulation of charter schools.
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Um, receivership is not being “shut down”. It’s simply passing management to another person or entity – which said person or entity doesn’t have to know anything about education.
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I’ll tell the parents of the kids who go to these schools in Ohio that they simply don’t understand market theory. Foreclosure means the market is working!
You know your plan only works if there’s a public system to fall back on, right? Every single one of these kids will have a “seat” in a public school. I think public schools should be compensated for acting as the safety net for charter schools.
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I won’t get into the real estate issues but shutting down schools is hardly an ideal scenario for any parent, child or family. By that standard, there would be a revolving door of schools in impoverished neighborhoods. Any number of studies reflect that students who undergo numerous transitions from one school to another suffer from disadvantages related to making new friends to adjusting to new school cultures.
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Mosaica took over the entire Muskegon Heights.MI public schools. When you read that New Orleans is the only wholly privatized district, that isn’t true. Muskegon Heights was privatized, and Mosaica was the contractor. They probably don’t mention Muskegon Heights because it’s Michigan, so who cares, and because it’s been a chaotic mess.
“Mosaica Education Inc. will no longer manage the Muskegon Heights charter school district, and plans will begin immediately to seek a replacement company.
The Muskegon Heights charter school board on Saturday, April 26 voted to amend its contract with Mosaica to run the schools from five years to two, effectively ending the contract on June 30. A new company will be sought for a three-year contract, through the 2016-17 school year.
Muskegon Heights Public Schools Emergency Manager Gregory Weatherspoon said the separation came down to an issue of finances. Mosaica, a for-profit company, was running a deficit budget and not making a profit.”
http://www.mlive.com/news/muskegon/index.ssf/2014/04/mosaica_out_as_manager_of_musk.html
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Threatened out West
October 22, 2014 at 11:03 pm
If they’re so opposed to it, why haven’t these “charter cheerleaders,” most of whom have huge amounts of money and influence in politics, not pushed for tighter regulations on charters? It does no good to say that they are “opposed to for-profit chartering,” when they allow for-profit groups to make obscene amounts of money in charters? These charter cheerleaders could get all kinds of regulations passed. But they don’t.”
In Ohio and Michigan the answer is “politics”. It’s a political coalition, ed reform, and they can’t lose any faction so they horsetrade.
There is a faction on the Right in ed reform who don’t have any problem with for-profit schools.
In my opinion, watching this for 20 years in this state, conservatives in the ed reform political coalition completely roll the liberals in every negotiation, so the liberals do some ineffectual whining but nothing happens and the liberals get no concessions on regulation in return for privatization.
It happens all the time. The Democrats and liberals in ed reform get zilch in these privatization deals. They get nothing in return. Conservatives must think they died and went to heaven. They get privatization and the end of public schools and teachers unions with no regulation or increased funding for education. Liberals get played in every single ed reform scheme. Snookered. They’re pathetic.
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So. District of NY Bankruptcy – Mosaica
https://www.kccllc.net/kodak/document/1210202140109000000000001
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So much for business “know how”. Can’t run a school nor a business. Too bad children and communities have been sacrificed by these clowns.
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The real estate wheeling and dealing should raise a red flag to all taxpayers – past, present and future who have, as a community, invested in local neighborhood schools for perpetuity. That those buildings would continue to educate each generation – a free, local and public education as envisioned by our forefathers. …and all that means to democracy.
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