Prescott Colege Hawaii Litigation Update

Discussion in 'General Distance Learning Discussions' started by JE Brunton, Oct 2, 2001.

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  1. JE Brunton

    JE Brunton New Member

    Last week the First Circuit Court of the State of Hawaii ordered Defendant Steven W. Moss, the proprietor of Prescott College (and now Clermont College), to turn over bank account records of the corporation within two weeks.

    Today, the court granted a request for the entry of a default judgment against the corporate defendant. The judgment bars the company from doing business in Hawaii, requires full payment of restitution to anyone requesting it and imposes a civil penalty of $500,000.00

    The corporation has been dissolved and there is, therefore, no expectation that the judgment will ever be paid by it.

    The case now focuses on the liability of the individual defendant, Mr. Moss.


    Jeffrey E. Brunton
    Staff Attorney
    Office of Consumer Protection
    State of Hawaii
     
  2. Rich Douglas

    Rich Douglas Well-Known Member

    With all of the huzzahs and hoorays regarding Hawaii's recent actions against bad schools who've set up shop there, I've been a dissenting voice. It's not that I'm not supportive of Mr. Brunton's activities in this area. I'm all for it. I've just been skeptical about the impact on the field as a whole. Operators of bad schools have a long and successful track record of evading state-level authorities. There is no limit to the "places" they can relocate to in order to resume their activities. It has generally taken federal action to stop them.

    Today, I'm reading something that actually put a smile on my face. The dissolution of the corporation doing business selling degrees "in" Hawaii is no big deal. As Mr. Brunton notes, collecting from the corporation is not going to happen. But going after the individual proprietor and his assets is sweet! My limited understanding of business law (one MBA class) tells me that liability for a corporation's actions can be extended to its owners in certain cases. In a case where the corporation is one in name only, where the owner operates like a sole proprietorship ("Pay no attention to that man behind the curtain!"), where the proprietor has the corporation act outside the law, perhaps the state can prevail. I still wonder about the prospects of ever collecting across state lines or national borders, though.

    I wish you continued success.

    Rich Douglas
     

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