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from: concord_facts@yahoo.com

Concord School of Law Update: 
False Affidavits filed with Federal Court 
(Says Concord not a part of Kaplan Higher Education Corp.)

Dear All:
 
I need your help.... Please Help! Kaplan has defame a student's good name to obstruction any resonable review a complaint filed against the first online law school. However, if there's nothing to the student's complaint and lawsuit, why did Kaplan officials file false affidavits in a Pennsylvania Federal Court?
 
1. On November 29, 2003, false statements, either knowingly or with reckless disregard for the truth were submitted to a Pennsylvania federal court as a further attempt to frustrate and/or obstruct the administration of justice.
 
2. That is, Cassandra Colchagoff,  Assistant Dean, Kaplan, Inc's Concord School of Law,  (she is also an attorney at law), knowingly caused a false affidavit to be submitted to federal court, in her name, attempting to avoid liability that provides specifically at paragraph 6 the following:
 
"Concord operates as a division of Kaplan, Inc. and is in no way connected to Kaplan Higher Education Corporation ("KHEC"), which is an incorporated subsidiary of Kaplan, Inc."
 
3. In addition, Gerald Kosentos, Executive Vice President of Operations, Kaplan Higher Education Corporation ("KHEC"), knowingly caused a false affidavit to be submitted to the court, in his name, attempting to avoid liability that provides specifically at paragraph
6 the following:
 
"KHEC operates approximately fifty-five vocational schools across the United States, none of which has any relation to Concord Law School ("Concord"), which is an unincorporated division of Kaplan, Inc. and a wholly separate entity."
 
4. However, as provided below, on November 15, 2002, Jonathan Grayer, Chairman and Chief Executive Officer, Kaplan, Inc. told shareholders that Gary Kerber the founder of Quest, runs Kaplan Higher Education and Concord School of Law!
 
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=WPO&script=1200&layout=-6
 
"That brings us to our largest division, and our newest, Kaplan Higher Ed. We provide programs to students in health care - Allied Health is another name for that segment - in criminal justice, helping individuals become police officers and other types of law-enforcement professionals; legal professionals, paralegals mostly. We have both a graduate program and an associates' degree program; design and fashion, not something most of us know a lot about, but Gary does; and business, undergraduate business degrees for people who want to get into some area of commerce; and, finally, information technology, which had been our fastest-growing program until the recent slowdown.
 
Gary Kerber is with us today. Gary was the founder of Quest Education, which we bought out of the public market in 2000, and ran a public company, a founder, who had the same long-term view of this business as we did, and has been an excellent addition to the top of management of Kaplan and The Washington Post Company. He's been mentioned a couple of times, but I don't think anyone has seen him. So, Gary, if you'll stand up so people can get a good look. This is a very important man to all of you right there.
 
This business has boomed since we bought it, and Gary and his management team are the reason why.
 
We have 45 campuses around the country. I showed a similar slide with 31, I believe, at the last shareholder meeting right after we bought it, and you'll see there's still a lot of opportunity for red circles in those blue states, and more importantly there's still a lot of blue states, and we're going to be opening up more campuses as we go. It takes a lot of management bandwidth to get one open, not easy, but we're excited about the prospect of doing so.
 
Year-to-date through nine months, those are our numbers. Very profitable business. You should know that on the total, the fourth quarter is, far and away, the largest quarter of the year for us. So we will finish substantially higher than $22 million in operating income. It has been an enormous year for your Higher Ed Division.
 
The public markets have recognized this segment, and the reason is you have high margins, and very, very large moats around the business because there's a lot of regulation and a lot of expertise needed to run these schools. We're lucky to have Gary and his management team who can do it. Your management team at Kaplan could not have gotten into this business on our own. We would not have had the expertise to do so.
 
What are the highlights? Well, look at that. This is a problem for next year.
Total revenue up 43 percent and operating income up 93 percent on a base of in the low 20s, not bought, but organically grown. This is the kind of year, when you look back on companies' histories, when great businesses are built, and I'm sure The Washington Post had a similar kind of time. This is our time, and Gary is doing it.
We have 20,000 enrolled students getting their associate or bachelor's degree, fully accredited from the same accreditors that accredit any great school in this country. We're going to open up new schools, and we are always looking for acquisitions. We have bought six or seven campuses this year. It's hard to buy schools, for a number of reasons; one, there's pricing pressure as private equity has come into the market, but, two, there's an enormous amount of regulation and small operators have not always followed the letter of the law. That poses risks for us when we acquire, so it's hard to get a deal done.
 
We're actively looking, but more importantly, we know we will open up more campuses ourselves to grow our distribution. We're sharing programs among schools, and we're getting the benefits as we grow of a larger distribution system. We can afford better talent, and we're keeping the best people that we have.
 
This business is all about the top management. Revenue is not the largest challenge here. The largest challenge is making sure that your students who are borrowing money from the federal government are able to repay their loans. If they can't repay their loans, you get that funding opportunity from the federal government taken away, you have no business, and the risks here are not insubstantial.
 
The sister company to our Campus Division that Gary runs is Kaplan Higher Education Online. This is actually a student going to Concord Law School. The student lives in Alaska. There is no law school in Alaska. We've joked about petitioning to become the official law school of the State of Alaska because we're the only law school that can offer a program there.

Alaska, we did talk to them, and they said, "What will you pay us?" and that was the end of that discussion.
 
But you'll see, he looks like he's going to law school, doesn't he? Well, he is, and next week we're graduating our first class-about eight students, which is a remarkable achievement for them. They bet on the Internet in ways that go beyond even how we're betting on the Internet. They have spent an enormous amount of time, much of which occurred between the hours of 10 p.m. and 4 a.m. They worked, they're all working adults, these graduates, and they're graduating with a full law degree, and we're having a big party for them in L.A. next week."
 
5. The Washington Post, Kaplan, Inc.'s Parent Corporation reported the following during its June 2003 Media Mid-Year Report:
 
"Kaplan, meanwhile, under the extraordinary leadership of CEO Jonathan Grayer and his team, continues to grow quite rapidly in revenue and operating income.
 
To refresh your memory, Kaplan reports its operating results in two groups. Supplemental Education includes Kaplan Test Prep and Admissions, the business in which we help students prepare for college and graduate admissions exams; Kaplan Professional, which offers licensing and continuing education training for professionals in financial services and real estate; and Score, our after-school learning center business for younger kids. Kaplan Higher Education includes online as well as traditional colleges and offers degree and certificate programs.
 
Test Prep now accounts for 29 percent of Kaplan's revenue; 21 percent comes from Kaplan Professional; and Score is at 8 percent. Revenues from Kaplan Higher Education account for 42 percent of Kaplan's total revenue.
 
Test Prep remains a fierce battle in every market with competitors large and small. But John Polstein and his team continue to win most of the battles.
 
Kaplan Professional has had another strong five months under Eric Cantor's leadership.
The biggest news here, of course, is Kaplan's expansion into the United Kingdom with its $87 million acquisition of FTC in March. This company is one of three offering training for accountancy tests in the U.K., Singapore, and Hong Kong. We negotiated carefully before taking Kaplan's first major step into international waters and can report, three months later, that FTC's business looks even better than we thought.
 
We've added a strong management team led by William Macpherson, who had built the business. The market is a large one, and FTC has plenty of room to grow.
And just last week, Kaplan announced the acquisition of Inspection Training Associates, the leader in home inspection training and education, which will become part of the Kaplan Professional schools.
 
Although it's the smallest of Kaplan's four major businesses, Score continues to show gratifying economic progress, while making us all feel great about the service it provides. This business is nudging into profitability while continuing to expand.
 
Kaplan's Higher Education division is booming ahead. We now have more than 10,000 students online through Kaplan College and Concord Law School. While Concord is small compared to the total size of Kaplan, I have to take time to brag. Of the ten students in Concord's first graduating class, six passed the California bar on the first try. This 60 percent pass rate, while it comes from a very small sample and may not be repeated, is higher than the 57 percent first-time pass rate from California-based ABA-accredited bricks-and-mortar law schools. It's also higher than the 22 percent first-time pass rate of California state bar-accredited schools.
 
Again, I mention these numbers not because they foretell a trend that online students will outperform everyone else. Rather these results offer proof, on a small scale, that online higher education works. This bodes well as Kaplan rolls out additional online programs.
 
Meanwhile, Higher Ed's traditional bricks and mortar campuses now have roughly 40,000 students each year in 47 schools in 15 states. Under Gary Kerber's leadership, they have had huge increases in student counts, revenues, and operating income. People are flocking to these schools because they produce practical results in terms of jobs and promotions in a very tough labor market."
 
6. This information has been forwarded to the FBI.... Please Help!
 
s/
Thank you

Third Concord Letter

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