Former parent of Princeton Review files for bankruptcy

Tue Jan 22, 2013 9:05am EST

Jan 22 (Reuters) - Education Holdings 1 Inc, the former owner of the Princeton Review test-preparation business, filed for bankruptcy protection a month after it agreed to settle allegations that it had made claims for tutoring services that it had not provided.

The company, whose biggest shareholder is Bain Capital Venture Fund, listed assets and liabilities of between $100 million and $500 million in its Chapter 11 petition filed on Monday.

Education Holdings sold the name and brand of the Princeton Review -- best known for its guides to prepare for competitive U.S. university pre-exams such as SAT, GRE and GMAT -- to TPR Education LLC last March.

TPR Education is not part of the bankruptcy proceedings and was not part of the civil lawsuit brought by the U.S. Justice Department over claims that Education Holdings had falsified student attendance numbers and invoices to participate in a government program providing tutoring services to under-performing schools in New York City.

Education Holdings admitted to engaging in fraudulent conduct and paid $10 million last month to settle the case.

None of the company's affiliates or subsidiaries, including its Penn Foster online unit, had sought bankruptcy protection.

Education Holdings said its pre-packaged bankruptcy plan, which requires approval from the bankruptcy court, had the support of senior secured lenders and prepetition noteholders.

It listed Falcon Investment Advisors and Sankaty Advisors among its largest unsecured creditors.

The Case is In re: Education Holdings 1 Inc, U.S. Bankruptcy Court, District of Delaware, No:13-10101.