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X - post Landry Academy Financial Problems?

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T<snip>

 

It's a hard field, and it needs careful management, good accounting, and good financial advice. And if you're doing a decent job, you have to charge decent tuition. Great online teaching for a bargain price is an illusion. As with most things in life, you end up getting what you pay for.

 

My $.02 on a rainy New Year's holiday.

 

SWB

 

+1   It could be that the people who'd purchased credits, to purchase courses, at highly discounted prices, for use 1 or 2 years in the future, began using them, in great numbers, and they didn't have the cash flow that was necessary to operate the school.  Someone here posted, I believe, that they had purchased those credits for 84% off.  So someone paying 16% of the normal price is going to get a quality course one or two years down the road?    I saw that in a Groupon, for a school in Spain, a couple of days ago. Up to 95% off.  How can a school discounting something like that provide a quality course?  I doubt that LA had a good C.P.A. or Manager. A conservative C.P.A. would have shown them that they were headed for trouble, with that business plan. 

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+1   It could be that the people who'd purchased credits, to purchase courses, at highly discounted prices, for use 1 or 2 years in the future, began using them, in great numbers, and they didn't have the cash flow that was necessary to operate the school.  Someone here posted, I believe, that they had purchased those credits for 84% off.  So someone paying 16% of the normal price is going to get a quality course one or two years down the road?    I saw that in a Groupon, for a school in Spain, a couple of days ago. Up to 95% off.  How can a school discounting something like that provide a quality course?  I doubt that LA had a good C.P.A. or Manager. A conservative C.P.A. would have shown them that they were headed for trouble, with that business plan. 

Agreed.  I think they must have had a CPA who was lacking experience/knowledge or clueless or just didn't care.  When I purchased my generics a few years ago there was a limit.  I couldn't buy a ton of them, only a few.  I assumed they were able to fairly accurately keep track of how many generics they could safely sell and were only selling up to that mark.  Now, I think I was wrong.

 

Whatever happened, I hope that those that lost so much will be able to recoup at least some of those losses and this will help other schools to be aware of potential pitfalls and be far more careful in how they operate.

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Agreed.  I think they must have had a CPA who was lacking experience/knowledge or clueless or just didn't care.  When I purchased my generics a few years ago there was a limit.  I couldn't buy a ton of them, only a few.  I assumed they were able to fairly accurately keep track of how many generics they could safely sell and were only selling up to that mark.  Now, I think I was wrong.

 

Whatever happened, I hope that those that lost so much will be able to recoup at least some of those losses and this will help other schools to be aware of potential pitfalls and be far more careful in how they operate.

 

I don't know how to use "Excel", other than to open a file someone sends to me, once or twice a year, so I can read that data. But, I bet my DD or someone who knows how to use "Excel" could show them, in "Excel",  "with that mix of payments you are going to fail, this is what will happen".

 

The airlines and hotels have computer programs that set their prices, to give them a mix that will be the most profitable for them. Some people (the bread and butter of the airlines) paying full fare, and others (like my family) buying non refundable tickets. 60 days in advance and receiving a huge discount off the full fare.  Yield Management.

 

I wonder if LA had a C.P.A.   I suspect they went to a Bankruptcy Attorney, during December, and were told there was no way for them to recover.  It would be interesting for everyone that has lost money with LA to know the true story of what caused the failure of the school.   

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Agreed.  I think they must have had a CPA who was lacking experience/knowledge or clueless or just didn't care.  When I purchased my generics a few years ago there was a limit.  I couldn't buy a ton of them, only a few.  I assumed they were able to fairly accurately keep track of how many generics they could safely sell and were only selling up to that mark.  Now, I think I was wrong.

 

 

 

I think part of their downfall was that they had no control over when the generics were redeemed. Since they sold them for "the such and such school year and beyond" people who bought generics in 2014, like I did, could all be redeeming them in the fall of 2016, like I did. But if a large percentage of the generics sold in 2013 and 2012 were also redeemed for the fall of 2016, you could suddenly have 75% of the kids in many of your classes enrolling with generics, which won't pay the bills. It doesn't matter if you control the number sold upfront if you don't control when they are redeemed. A better plan would have been to sell generics for specific school years only. Then Landry would have controlled the number of generics that would be redeemed in a given year, and they could have kept the numbers low enough to still allow them to be a profitable business.

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  It would be interesting for everyone that has lost money with LA to know the true story of what caused the failure of the school.   

 

Indeed, it would.  I thought that the IRS offered long-term payment plans to individuals and businesses assessed with penalties and back taxes.

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Indeed, it would.  I thought that the IRS offered long-term payment plans to individuals and businesses assessed with penalties and back taxes.

 

The failure of LA may have little, or nothing, to do with the I.R.S.   This may have more to do with their "business model", which was Ponzi like.  It would be interesting to know what really happened. If they eventually file for Bankruptcy, some of the details will be public.  Or, if someone sues them, and the court makes the details public.  Very sad, whatever happened.  Today, I read about a teenager who'd worked and paid thousands for a trip to Europe. Add the $ people had paid for trips they will never go on, to the people who lost $ paying in advance.  I suspect the Liability is in the hundreds of thousands of dollars, at a minimum, and that they did not have a Line of Credit with their bank that could get them through this, so they could restructure their business model, by eliminating or reducing the discounts..  

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One another place, there is a person who has added up to almost 3 million dollars lost. I don't know how true that is nor this but they are saying that LA had 55,000 students. That is a huge amount. They also found another site, that he sold his NC home during the summer. Now his farm in TN is up for auction. No word on the LA home.

 

The whole thing is just sad on so many levels.

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It's crazy to me that they're losing their farm and sold their house. That's sad. We have a family literally right down the road from us who owned a huge business and filed bankruptcy. They stiffed a ton of employees and customers- the local new covered it heavily at the time. They are sitting in their million dollar house/hobby farm with more ATVs and vehicles than I can count, all since filing back in 2013. From appearances it certainly did not curtail their living situation. They just listed their house recently, but it's not being auctioned or anything, so obviously not desperation. I guess it all depends on the deal you work out with the IRS? I always was frustrated knowing they had stiffed people on several thousand dollars orders, when they would pull up with their new Gator or Ford F250........doesn't sound like that's what happening with the Landry's. 

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I think part of their downfall was that they had no control over when the generics were redeemed. Since they sold them for "the such and such school year and beyond" people who bought generics in 2014, like I did, could all be redeeming them in the fall of 2016, like I did. But if a large percentage of the generics sold in 2013 and 2012 were also redeemed for the fall of 2016, you could suddenly have 75% of the kids in many of your classes enrolling with generics, which won't pay the bills. It doesn't matter if you control the number sold upfront if you don't control when they are redeemed. A better plan would have been to sell generics for specific school years only. Then Landry would have controlled the number of generics that would be redeemed in a given year, and they could have kept the numbers low enough to still allow them to be a profitable business.

 

Not really. You should assume most people will use the generics as soon as they can, and also assume that the people who didn't use them as soon as they can, will use them at the next opportunity. Once you've been doing this for several years, you can come up with better estimates of how many people actually will use the generics and when, and eventually after several years you can assume that unused generics aren't going to be used, but this was way too early in. They just seriously messed up.

 

It's crazy to me that they're losing their farm and sold their house. That's sad. We have a family literally right down the road from us who owned a huge business and filed bankruptcy. They stiffed a ton of employees and customers- the local new covered it heavily at the time. They are sitting in their million dollar house/hobby farm with more ATVs and vehicles than I can count, all since filing back in 2013. From appearances it certainly did not curtail their living situation. They just listed their house recently, but it's not being auctioned or anything, so obviously not desperation. I guess it all depends on the deal you work out with the IRS? I always was frustrated knowing they had stiffed people on several thousand dollars orders, when they would pull up with their new Gator or Ford F250........doesn't sound like that's what happening with the Landry's. 

 

It varies by state how much your own house is protected by bankruptcy (as in, how expensive it can be and still be protected - and, I do think that in some states that number is too high). Also, it's pretty much only the one property you're actually living in that is protected. And, there are exceptions, etc, etc.

 

Main lesson is to make sure kids have a solid understanding of basic accounting and business management etc before they graduate high school.

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DD just found out that someone she knows had been taking at least one course from Landry Academy...   I had mentioned to DD, probably in the last day or two, that possibly she was taking course(s) from Landry Academy.  We know she was taking Spanish from LA, and it sounds like they have connected with her teacher.   

 

Hoping that family did not lose a lot of money with Landry Academy. Each family with one or more students in Landry Academy has been hurt by this and it is very sad, for all of you.  

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from the FB posts for those not on FB:  

 

FYI, Landry ledgers have been updated with additional columns.  This may be helpful for disputed CC charges according to comments.

Edited by melmichigan
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from the FB posts for those not on FB:  

 

FYI, Landry ledgers have been updated with additional columns.  This may be helpful for disputed CC charges according to comments.

 

What columns have been added?  I looked at it and don't see any difference except is says "REFUND" and "NO".  That actually looks worse to me.  And they took the dollar sign off the charges so it doesn't even look like money-- curious if this is actually going to help me or hurt me.  I have not gotten a good response from my credit card company yet--

 

b

 

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At least on my account, the amounts billed for services are in red now, with the rest in green, and there is a column called "refund" with a "no" in it.  This is total speculation, but the "refund" column makes me suspect they are planning to refund people when they get the funds - maybe from the sale of their farm???  I'm not on FB, though, so I'm sure I've missed a lot of discussion about this.  What do the rest of you think?

 

 

 

 

 

 

 

Edited by klmama
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If the mention of a total of approximately 3 million dollars is anywhere near to correct, it is unlikely they will get enough $ from the sale of their property to refund that much to the victims.  That would also be quite a hit for the banks to take upon themselves to refund on behalf of Landry Academy.   Since they had recently received money for textbooks they were selling, I believe people who purchased textbooks, with a credit card, have the best chance of their bank crediting their account, as a good will matter, if not something they need to do under the law.  Possibly people who paid for Textbooks with a Debit Card might also have some protection.  People who paid with Checks are probably out of luck.  I hope I am wrong and that the victims will receive some or all of what they paid to Landry. That will probably take a long time.  

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It seems to me that for them to be auctioning off their property, this whole thing has to have been in the works for a while. This sort of thing doesn't happen overnight.

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It seems to me that for them to be auctioning off their property, this whole thing has to have been in the works for a while. This sort of thing doesn't happen overnight.

 

Probably that is absolutely true. It would be interesting to know exactly what happened.  If they eventually file Bankruptcy, or someone sues them, it may come out in information that is publicly available.  Very sad, for all of the victims.  To me, the fact that they were apparently receiving payments from the victims, as late as December 2016, is the most troubling thing.   Very dishonest of them and possibly that is a Criminal matter.   Fraud, theft, etc.  

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Probably that is absolutely true. It would be interesting to know exactly what happened.  If they eventually file Bankruptcy, or someone sues them, it may come out in information that is publicly available.  Very sad, for all of the victims.  To me, the fact that they were apparently receiving payments from the victims, as late as December 2016, is the most troubling thing.   Very dishonest of them and possibly that is a Criminal matter.   Fraud, theft, etc.  

 

I'd bet they were unrealistic in thinking they could pull it out. No one knew but their inner circle. They hoped that by not paying the teachers what they were due that they might be able to continue. Something drove them over the edge though, and they closed.

 

This happens over and over in small businesses. Only a handful of people know the true situation, and then one day they're gone. The customers and employees are left shocked and scrambling.

 

There was a local handyman business that tanked after a Groupon deal. They couldn't handle the deals along with their other business and then they couldn't pay their employees. The majority of their employees quit, and they still had unfulfilled Groupon deals. They had a prominent building on the main drag in town, and overnight they emptied the building and put a big sign on the door. We know several college students who worked part-time for them and families who had projects that either weren't started with a deposit down or were incomplete when that happened. They also made a big deal about being a Christian-owned business. They filed for bankruptcy, but I don't know if anyone got back what was owed them.

Edited by G5052
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Hi all, 

 

I'm super late to the discussion but just heard the news and am shocked and saddened. 

 

Last June, I registered my daughter at Landry for the first time. We signed her up for two full year classes (2016-2017) and one spring class (2017). The fall semester was a great experience for her academically. The teachers were professional and rigorous and my daughter learned a lot. 

 

By the beginning of December, we made the decision to change our daughter's schedule for the spring semester. Since she is the only child left at home and becomes isolated easily, we chose to register for some similar classes at a nearby co-op at a reasonable price. It was not out of dissatisfaction with Landry but rather as a way to get our daughter into more classes in person and out of the house. 

 

On December 20th, I printed off my daughter's academic records from her Landry account. I then emailed Landry, explaining our decision to withdraw for second semester, and requesting that the spring course she was registered for be converted to a generic credit. I received a reply from them within a few short minutes. They withdrew her from the classes and also billed us a $10 fee for converting the spring class to a generic credit. When I viewed my daughter's account, I found it strange that any evidence of the classes she had taken were all gone. Thankfully, I had the foresight to print off the records in advance. 

 

I only found out about today about the closing because I went to their website to start planning courses for the fall. I never received any email or notification. I'm still in shock and am hoping that by this point many of your have been able to make arrangements for your students for this semester. Sad for all involved. 

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On December 20th, I printed off my daughter's academic records from her Landry account. I then emailed Landry, explaining our decision to withdraw for second semester, and requesting that the spring course she was registered for be converted to a generic credit. I received a reply from them within a few short minutes. They withdrew her from the classes and also billed us a $10 fee for converting the spring class to a generic credit. 

 

I wonder if that was an automated charge because if not...wow. Just wow.

 

Sorry for the loss on the generic credit but I hope your daughter is enjoying her co-op classes.

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I wonder if that was an automated charge because if not...wow. Just wow.

 

Sorry for the loss on the generic credit but I hope your daughter is enjoying her co-op classes.

 

MerryAtHope, it didn't seem to be an automated charge. The woman who replied to my email told me in her response that she had put a $10 charge on my account to convert the class to a generic semester. It's only $10 but it still gives me a sick feeling in my gut. I really have no idea what has gone on behind the scenes but it seems to be a disaster for all involved. 

 

Considering the amount of money others lost, I don't feel too bad about the loss of my one generic semester. How sad for everyone impacted by this. 

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 It's only $10 but it still gives me a sick feeling in my gut. 

 

Exactly. It wasn't the amount but the timing that made me feel stunned. I know others have lost huge amounts, and I know they took registrations up to the very end, so I guess it shouldn't have surprised me. And, I suppose it's possible that it was a staffer and they weren't told until the doors actually closed, so-to-speak. I guess we'll never know the inner workings and thought-process. Still, wow.

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I hate to bump this as it brings up bad memories & horrible lumps in my stomach, but I wanted to update on credit card disputes - specifically mine. I had two purchases in the past six-eight months for 2018 and beyond services. I disputed those through my credit card (Discover) and they just let me know they've completed the review of all the documentation I sent them & decided the charges are valid.  :crying:  So, my dispute was denied. (I'm disputing the results & they said they'd look back over everything again & get back to me in a week.)

 

I know the big group buy from WTMers is being disputed, but I think since that one was older it will take longer to decide (60 or 90 days vs. 30?). Just . . . not good news for me, anyway.  :glare:  

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I hate to bump this as it brings up bad memories & horrible lumps in my stomach, but I wanted to update on credit card disputes - specifically mine. I had two purchases in the past six-eight months for 2018 and beyond services. I disputed those through my credit card (Discover) and they just let me know they've completed the review of all the documentation I sent them & decided the charges are valid.  :crying:  So, my dispute was denied. (I'm disputing the results & they said they'd look back over everything again & get back to me in a week.)

 

I know the big group buy from WTMers is being disputed, but I think since that one was older it will take longer to decide (60 or 90 days vs. 30?). Just . . . not good news for me, anyway.  :glare:  

That stinks.  I'm sorry.

 

Soooo many people were negatively affected.  It makes me sad.  My kids really enjoyed their classes and teachers and classmates, too.  

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I hate to bump this as it brings up bad memories & horrible lumps in my stomach, but I wanted to update on credit card disputes - specifically mine. I had two purchases in the past six-eight months for 2018 and beyond services. I disputed those through my credit card (Discover) and they just let me know they've completed the review of all the documentation I sent them & decided the charges are valid. :crying: So, my dispute was denied. (I'm disputing the results & they said they'd look back over everything again & get back to me in a week.)

 

I know the big group buy from WTMers is being disputed, but I think since that one was older it will take longer to decide (60 or 90 days vs. 30?). Just . . . not good news for me, anyway. :glare:

I'm very sorry, I'm in the middle of a dispute too. Plus, I had to pay another $240 to continue this semester. Argh!

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I hate to bump this as it brings up bad memories & horrible lumps in my stomach, but I wanted to update on credit card disputes - specifically mine. I had two purchases in the past six-eight months for 2018 and beyond services. I disputed those through my credit card (Discover) and they just let me know they've completed the review of all the documentation I sent them & decided the charges are valid.  :crying:  So, my dispute was denied. (I'm disputing the results & they said they'd look back over everything again & get back to me in a week.)

 

I know the big group buy from WTMers is being disputed, but I think since that one was older it will take longer to decide (60 or 90 days vs. 30?). Just . . . not good news for me, anyway.  :glare:  

 

I'm sorry.  That is so wrong and I'm glad you are appealing.  We are still waiting to find out from our credit card company.

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RootAnn,  What did they give as a reason for denying your claim? I sent a letter to CHASE VISA documenting my six disputed charges along with the relevant portion of my Landry Ledger through their online portal.  Finally, I talked with a real person (after 3 failed attempts) who asked me a lot of follow-up questions.  He was particularly interested in the exact dates that services were to be received. Normally, our claim would not be considered because we are past the 118 day time limit to file, but because all of the disputed charges were for FUTURE SERVICE NOT RECEIVED, we qualified under a more generous timeline even though some charges are from 2015, so make sure your credit card company knows that the services you paid for were not received because the business closed its doors. 

 

Last week, I received a temporary credit from my credit card company for ALL SIX charges that will become permanent after two billing cycles IF Landry does not dispute it.  I would definitely appeal and ask for clarity on their policy.

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RootAnn,  What did they give as a reason for denying your claim?

 

They didn't give a reason on their online portal. They just said my evidence (which included receipts, the letter from Landry saying they were closing, and copies of pages that listed "2018 and beyond" for many things) wasn't enough to show services weren't received. That, of course, didn't make any sense. So, I called them. I got asked lots of questions & the person on the other end went through my evidence with me and made notes. (Second time this happened, BTW. Went through it when I filed the claim in the first place - just like you described.) She said they'd relook at everything. I'm not sure they actually looked at anything in the first place since it was pretty obvious to both people I talked to in the dispute department (both the first person a month ago & the person I just talked to). I don't know what they were doing that whole month . . . ignoring everything & hoping I wouldn't fight the denial?  :confused1:

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My CC hasn't asked for anything. Gave me a temporary credit and said it's mine in 60 days if Landry didn't respond to their request for info. I have 30 days left...

 

I opted not to try previous stuff. It gets messy with some of the credits used and for layer.

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Some might have missed it, so thanks for adding the link.  Please note that the Landry credit needs to be an equivalent dollar amount.  

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