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Highlands Community and Technical Schools, a Sacramento-area adult charter school accused by California officials of financial misconduct, filed for bankruptcy after negotiations over repayment broke down. The school says it remains open while it pursues court-supervised reorganization; a hearing is scheduled for Thursday.
Highlands Community and Technical Schools, a Northern California charter school accused by state officials of misspending public funds, filed for bankruptcy on Sunday after negotiations over repayment broke down. The school said its six Sacramento-area campuses remain open as it seeks court-supervised reorganization; a hearing is scheduled for Thursday.
The bankruptcy petition was filed in the U.S. District Court for the Eastern District of California. Highlands reported having between 1,000 and 5,000 creditors, including the California Department of Education and Twin Rivers Unified School District, which holds the school’s current charter. According to the filing, the department is seeking $243 million, while Twin Rivers says it is owed $2.4 million. Highlands disputes the charges.
The school serves about 2,000 adults seeking high school diplomas, English classes or job skills. Executive Director Jonathan Raymond said the bankruptcy process is intended to keep the schools operating while financial claims are addressed. The California Department of Education did not comment to CalMatters, whose report was republished by The 74. Twin Rivers had not responded to a request for comment by the report’s deadline.
Highlands also has an unresolved effort to relocate to Sutter County and operate under the name California Learning Academy. Yuba City Unified School District denied a charter request in July, and the school is awaiting a decision from the Sutter County Board of Education on its petition for a new charter.
Bankruptcy Puts School Finances Before Court
The filing puts the dispute over potentially large repayment claims into a court-supervised process, while the school says it will continue serving students. The outcome could affect the school’s ability to meet its obligations and sustain its operations, though the bankruptcy filing itself does not establish whether the allegations are true or what amount, if any, Highlands must repay.
The immediate stakes extend beyond the school’s balance sheet. Highlands serves adults seeking credentials, language instruction and job training, including many immigrants, according to the report. Any change in its ability to operate could affect those students’ access to classes. For now, the school says its campuses remain open; the report does not describe any interruption to instruction.
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Audit Findings Behind the Dispute
The conflict follows a 2025 California State Auditor report that accused Highlands leaders of misstating attendance and collecting state funding for students who did not exist. The auditor also raised concerns about hiring, including the employment of unqualified teachers and alleged nepotism in hiring and contracting. These are findings and allegations attributed to the audit; Highlands disputes the financial claims at the center of the case.
The auditor’s report cited spending that included $1.2 million at the Grand Hyatt Hotel in San Diego and board trips to Paris and Hawaii. Raymond said Highlands has addressed 18 of the audit’s 19 recommendations and appealed the remaining recommendation, which concerns alleged misuse of funds. An administrative law judge is expected to issue a ruling on that appeal soon.
Raymond also said the school replaced all senior staff after the audit and moved to replace teachers who lacked qualifications with credentialed teachers or those working toward credentials. Founded in 2014, Highlands provides adult education at six campuses in the Sacramento area.
Repayment and Charter Plans Remain Unsettled
The filing does not resolve whether Highlands owes the sums demanded by the California Department of Education or claimed by Twin Rivers. The school contests the charges, and the report does not provide the agencies’ supporting calculations or Highlands’ detailed response to each claim. The bankruptcy court’s decisions and the outcome of the separate administrative appeal are not yet known.
It is also unclear when the Sutter County Board of Education will rule on Highlands’ petition, or whether the proposed California Learning Academy would be able to operate if approved. The source report gives no details about how bankruptcy might affect that petition. The school’s stated plan to remain open is not a guarantee of its future operating status.
Court Hearing and Sutter County Decision
The next reported bankruptcy milestone is a hearing set for Thursday in federal court. The source does not specify the hearing’s calendar date or say what issues the court will take up. Further court filings or orders may clarify how the school intends to reorganize and how creditors’ claims will be handled.
Separately, the school is awaiting the Sutter County Board of Education’s decision on its new-charter petition. An administrative law judge is also expected to rule on Highlands’ appeal of the remaining state-auditor recommendation. These proceedings are distinct; their timing and effect on the school’s operations remain uncertain.
Key Questions
Has Highlands Community and Technical Schools closed?
No closure is reported. The school says it remains open at its six Sacramento-area campuses while the bankruptcy case proceeds.
How much money is being claimed from the school?
According to the bankruptcy filing as described in the report, the California Department of Education is seeking $243 million. Twin Rivers Unified says it is owed $2.4 million. Highlands disputes the charges; the filing does not establish that either amount is owed.
What led to the bankruptcy filing?
Highlands said it filed after repayment negotiations broke down. The dispute follows a 2025 state auditor report that accused school leaders of misstating attendance and raised other concerns about spending and hiring.
Will Highlands move to Sutter County?
That remains undecided. Highlands is awaiting a decision from the Sutter County Board of Education on a petition to open under the name California Learning Academy. Yuba City Unified School District denied a separate charter request in July.
What happens next in the bankruptcy case?
A court hearing is scheduled for Thursday, although the source report does not provide a calendar date or details of the hearing’s agenda. The court’s next steps and the resolution of creditor claims are not yet known.
Source: rss
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