Statement from Community Education Centers, Inc, in response to the New York Times on July 17, 2012.
“Again, the New York Times has failed to understand the definitions of certain key terms, and then chose to rely on one side’s position in a complex pending litigation, leading it to make false claims about the financial stability of Community Education Centers, Inc.
To repeat what we have repeatedly explained to the Times: CEC has never defaulted on the payment of its debt obligations, has never had a disruption of a contract in New Jersey or any other state, and has never missed a payroll. In the company’s sixteen years of operation, it has never had plans for bankruptcy and never hired bankruptcy counsel. The Times is ignoring the real facts, and in focusing on one party’s version of the story, has reported misleading and false assertions. There was no basis to do so. Indeed, the Times chose to cherry pick isolated assertions made in a pending civil litigation filed by plaintiffs who stand to gain financially by intentionally harming CEC.
The referenced events in the litigation concern compliance with certain financial covenants contained in the Company’s loan document. Those issues were subsequently remedied as evidenced by a clean audit opinion for the Company’s annual financial statements. During the financial downturn, many companies violated covenants contained in loan agreements; but as the New York Times surely knows, many such covenants are technical, and merely being in violation of such a covenant does not mean that a company defaulted on its obligation to repay its debts. Again, it was false for the Times to suggest that CEC has ever defaulted on any obligation to repay a loan. CEC has never done so.
The historic, global financial crisis of 2008-09 had a negative impact on CEC, as it did on countless other companies, particularly those, like CEC, that work exclusively with the public sector. During the most challenging moments of the economic downturn, CEC always continued to meet its contractual obligations. And CEC remains justifiably proud of its daily efforts as a leading provider of offender reentry services.”