WCPO, "Cincinnati-based Union Institute files for bankruptcy"

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WCPO I-Team article by Dan Monk reporting that Union Institute & University, a Cincinnati-based online university that permanently closed last June, has filed for bankruptcy. The article states that the Chapter 7 filing estimates total liabilities of $28.5 million and assets of $191,335. It says an April 11 filing estimates the school owes unpaid wages to 235 people and lists 534 former students as unsecured creditors with no money owed to them. It reports that students and employees are pursuing three separate lawsuits and that their attorneys are asking Bankruptcy Judge Beth Buchanan to let them pursue damages through a $5 million insurance policy.

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Cincinnati-based Union Institute files for bankruptcy; school still owes 235 people unpaid wages

'It was more than a job to me'

Union Institute

By: Dan Monk

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CINCINNATI — Union Institute & University has filed for bankruptcy, as dozens of its former students and employees seek court judgments to claim a piece of the school’s dwindling pile of assets.

The Cincinnati-based online university permanently closed last June, after a year of turmoil in which employees worked without pay and students found it difficult to obtain transcripts so they could relocate to other schools.

Union Institute’s Chapter 7 bankruptcy filing estimates total liabilities of $28.5 million and assets of $191,335. That is a stunning change from June 2022, when Union Institute’s tax returns listed total assets of $11.9 million and total liabilities of $6.1 million.

WATCH: Union Institute's bankruptcy is personal for some

Cincinnati-based school files for bankruptcy, still owes 235 people unpaid wages

Students and employees are pursuing three separate lawsuits against Union. Their attorneys are asking Bankruptcy Judge Beth Buchanan to let them pursue damages through a $5 million insurance policy Union purchased for “educators legal liability and employment practices liability.”

The answer to that request could determine whether students and employees collect any damages from Union’s collapse.

An April 11 filing estimates Union owes unpaid wages to 235 people, while 534 former students are listed as unsecured creditors with no money owed to them. The filing also lists 65 companies and government agencies owed “business debt,” including Covington-based Corporex Cos. Inc., which evicted the school from its Walnut Hills headquarters in 2023.

Corporex is owed $282,000 from an unpaid judgment against Union plus $8.5 million in “accelerated base rent” for the remainder of its lease.

That makes Corporex a bigger loser than the U.S. Department of Education, which is owed $3.5 million in fines and $772,000 in student loan debt.

Two members of Union Institute’s management team are listed as both creditors and debtors in the filing. Former President Karen Schuster Webb is owed $80,000 in unpaid wages, while Sandra Mills is owed $56,757. Both are listed as co-debtors on $563,415 borrowed from Cedar Advance LLC and Delta Bridge (CloudFund).

The bankruptcy filing brings up bittersweet memories for former students like Bryon Garner, who turned his college dissertation into a book about Black veterans in the U.S. military.

The book, “Black Veteranality: Military Service and the Illusion of Inclusive Patriotism,” will be published in July by Routledge.

“What makes me sad is, but this is also the real story with Union, is that these instructors were guiding me through my dissertation process while they were not getting paid,” Garner said.

Bankruptcy records show one of Garner’s favorite teachers at Union, Christopher Voparil, is still owed $29,644 by the school.

“That’s sad,” Garner said. “He's a great person, great human being, but also was a great mentor and just meant a lot for my journey.”

Some faculty members kept working with students after Union closed.

“It was more than a job to me,” said Corina Smith, who is owed $25,943 in unpaid wages. “I kept working because I was very proud of our emergency services and criminal justice programs. They were like no others.”

Smith scoffs at the idea that Union’s former president is owed $80,000, according to the bankruptcy filing. Smith blames Webb for Union's downfall, as the school had $6.3 million in cash and a $3 million endowment when Webb took the helm in 2018 .

“I’ve never seen anyone with a more broken moral compass,” Smith said.

The bankruptcy case is likely to stall three pending lawsuits in which students and former employees are seeking damages for unpaid wages and damage done to their academic careers.

Here is a summary of those pending cases:

- Diane Richard-Allerdyce filed a lawsuit on Dec. 5, 2023 that lists 32 former faculty and administrative employees as plaintiffs. This case asserted state and federal claims over the non-payment of wages and federal claims over the loss of benefits. Judge Matthew McFarland dismissed all state claims on Sept. 27, 2024, but allowed the case to proceed on federal claims.
- Brittany Alon and nine other Union Institute students filed a proposed class action on June 20, 2024, asserting “an amount in controversy” exceeding $5 million. It seeks damages on behalf of students “adversely affected by the university’s actions” since Jan. 1, 2023.
- Alexis Sanchez sued on March 18, along with 34 former Union Institute employees who named the school, its president and eight of its board members as defendants. The lawsuit makes state and federal claims similar to the Allerdyce case. All three cases are likely to be combined if the bankruptcy filing doesn’t derail them.

A fourth lawsuit against Union Institute was dismissed last fall. In that 2023 case, Marie McGonegle filed proposed class-action lawsuit against Union, claiming violations of the federal Fair Labor Standards Act. The case resulted in a negotiated settlement that U.S. District Judge Douglas Cole rejected in May 2024. The case was dismissed with prejudice last September.

The Ohio Department of Education said five schools have agreed to help Union students transfer credits to their own programs. Those schools are: Albizu University, Antioch University, National University, Spring Arbor University and University of New England.

Union students might be eligible for student loan forgiveness. Details on the loan discharge process can be found here .

Union Institute transcripts are available for distribution through Parchment .

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