CEC Class Action Settlement Litigation

This Settlement involves three Class Action lawsuits (the "Class Actions"). The first of the three Class Actions, Outten v. Career Education Corporation, LASC Case No. BC 318199 was filed on July 8, 2004 in the Los Angeles County Superior Court on behalf of students who enrolled at the Los Angeles campus of American InterContinental University from January 1, 2001 to August 31, 2007. Thurston v. Brooks College, LASC Case No. NC 036756 was filed in the Los Angeles County Superior Court on or about March 21, 2005 on behalf of students who enrolled at Brooks College (either the Long Beach or Sunnyvale campuses) from March 21, 2001 to August 31, 2007. The third Class Action, Nilsen v. Brooks Institute of Photography, Santa Barbara Superior Court Case No. 1165597 was filed in the Superior Court for Santa Barbara County on February 4, 2005 on behalf of students who enrolled in Brooks Institute of Photography from January 1, 1999 to August 31, 2007.

In each case, the class of Plaintiffs are represented by "Named Plaintiffs" who are the individual plaintiffs identified in each Litigation. On behalf of all Class Members, the Named Plaintiffs allege that the Defendants misrepresented graduate employment rates, retention and graduation rates, financial aid, the competitive nature of the admissions process, graduates starting salaries, transferability of credits, the schools' admissions criteria, the reputation of the schools, academic reputations, quality of education, and career employment services to prospective students. It is also alleged that the schools failed to provide legally required disclosure documents, including school performance fact sheets containing graduate employment and completion rates and credit transferability disclosure statements. The lawsuits seek tuition refunds and other damages, plus punitive damages for violations of California's Education Code, Unfair Competition law, and Consumer Legal Remedies Act. The Defendants deny all of these allegations.

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