Jonathan Foster Helps ITT Educational Services’ CEO Win Summary Judgment in Bankruptcy Litigation
New York, New York, June 30, 2022 – The United States District Court for the Southern District of Indiana granted ITT Educational Services Inc.’s former Chief Executive Officer, Kevin Modany, summary judgment, rejecting claims that he breached his fiduciary duties.
Jonathan Foster, Managing Director of Current Capital, was retained on behalf of the CEO, filed an expert report and was deposed on custom and practice for a company’s evaluation of potential strategic transactions.
ITT operated a nationwide group of for-profit higher education institutions until September of 2016, when it declared bankruptcy and closed its schools. Thereafter, the United States Department of Education released thousands of former students from their loan obligations and filed a claim in ITT’s bankruptcy seeking reimbursement of over $230 million for former-student debt.
ITT’s Bankruptcy Trustee filed an action against Modany and former members of the Board of Directors, alleging that they breached their fiduciary duties and caused ITT to become liable for the Education Department’s claim.
The United States District Court for the Southern District of Indiana previously dismissed the directors and, just this week, granted Mr. Modany summary judgment rejecting the Trustee’s claims.
In his expert report, Foster discussed custom and practice regarding the consideration, evaluation and potential recommendation and completion of a sale of a company by a CEO and Board in order to opine on whether Mr. Modany and the directors of ITT acted consistent with custom and practice in their deliberations over certain potential strategic transactions and their use of regulatory counsel in those efforts. He also opined on the ITT Board following custom and practice in determining Mr. Modany’s compensation from 2014 to 2016.
Foster was retained by Greenberg Traurig, LLP, counsel for Defendant Kevin Modany, and supported by Cornerstone Research.
About Current Capital Partners
Current Capital Partners LLC is an independent advisory and merchant banking firm focused primarily on the industrial and services sectors. We provide mergers and acquisitions advisory services, corporate management services, and private equity investing. The mergers and acquisitions advisory effort offers high-quality financial advisory services – including actionable ideas, buy-side and sell-side execution, strategic and capital structure reviews, restructuring advisory and related services – for corporate and investment firm clients seeking industry expertise, an independent perspective and senior attention. In our management services effort, we manage investments, provide restructuring advice, sit on Boards of Directors and provide related consulting services for other investors and financial institutions; and offer advice and expert witness services in complex corporate litigation. Our private equity investing business helps create value, primarily in lower middle market and smaller companies, with an integrated operating, finance and investment approach. Our Advisory Board and Executive Network are important advantages for our clients. Learn more at www.currentcap.com.
Jonathan F. Foster
Telephone: +1 212 223 0618