TL;DR
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Highlands Community and Technical Schools, a Sacramento-area charter school serving about 2,000 adults, filed for bankruptcy after repayment negotiations broke down. The school disputes claims tied to a state audit and says it plans to remain open while the court reviews its finances.
Highlands Community and Technical Schools, a Sacramento-area charter school serving about 2,000 adult students, filed for bankruptcy after negotiations over repayment of disputed financial claims broke down. The school remains open, and its executive director said the filing is intended to support reorganization while the claims are addressed in court.
The school filed in the U.S. Bankruptcy Court for the Eastern District of California, according to its petition. It reported between 1,000 and 5,000 creditors, including the California Department of Education and Twin Rivers Unified School District, which holds Highlands’ current charter. The filing says the state Department of Education is seeking $243 million; Twin Rivers says it is owed $2.4 million. Highlands disputes the charges.
The bankruptcy follows a 2025 California State Auditor report that accused school leaders of misstating attendance and collecting state funds for students who did not exist. The auditor also cited concerns about teacher qualifications, hiring and contracting practices, and spending. Among the expenses identified in the report were $1.2 million at the Grand Hyatt Hotel in San Diego and board trips to Paris and Hawaii. These are findings and allegations reported by the auditor, not amounts established here as a final court judgment.
Executive Director Jonathan Raymond said Highlands had addressed 18 of the auditor’s 19 recommendations and appealed the remaining one, which concerns alleged misuse of funds. Raymond also said senior staff have been replaced and the school has moved to replace teachers who lack qualifications with credentialed teachers or those working toward credentials. An administrative law judge is expected to issue a ruling on the appeal soon.
Bankruptcy Puts School Finances Before Court
The filing places Highlands’ dispute with public agencies into a court-supervised reorganization process. It matters to students because the school says it will continue operating while the case proceeds, but the filing comes amid large repayment demands and scrutiny of how public education funds were used. Any eventual court decisions or repayment terms could affect the school’s finances and its ability to maintain services.
Highlands provides adult education, including high school diploma programs, English classes and job-skills instruction. The report says many students are immigrants. For them, continuity of classes is a direct concern, although the source report does not describe any immediate changes to schedules, enrollment or services. Bankruptcy filing by itself does not establish that the school will close or that the disputed claims are valid.
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Audit Dispute and Charter Plans
Founded in 2014, Highlands operates six campuses in the Sacramento area. The audit’s allegations prompted institutional changes described by Raymond, while the disputed funding issue remains under appeal. The state Department of Education did not comment on the bankruptcy, and Twin Rivers Unified did not respond to a request for comment by the report’s deadline.
The school is also pursuing a possible move to Sutter County under the proposed name California Learning Academy. Its petition for a new charter is awaiting a decision from the Sutter County Board of Education. Yuba City Unified School District denied a charter request in July, according to the report. The bankruptcy filing and the charter petition are separate developments; the source material does not say whether the court case will affect the pending petition.
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Repayment Claims and School Future
The bankruptcy petition does not resolve whether Highlands owes the amounts claimed by the state or Twin Rivers. The $243 million state demand and the district’s $2.4 million claim are reported as creditor claims, while Highlands disputes the charges. The source material does not provide a detailed breakdown of the state’s demand or say how much, if anything, the school acknowledges owing.
It is also not yet clear what terms the court may set for reorganization, whether the school can sustain operations during the proceedings, or whether the Sutter County charter petition will be affected. The administrative appeal over the alleged misuse of funds remains pending, with a ruling expected soon, but no date or outcome is given.
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Court Hearing and Charter Decision
A bankruptcy hearing is scheduled for Thursday, according to the report. The court-supervised process will address the school’s financial claims and reorganization, though the source material does not specify what issues will be decided at the hearing or what timetable will follow.
Separately, an administrative law judge is expected to rule on Highlands’ appeal of the auditor’s remaining recommendation. The Sutter County Board of Education also has yet to decide on the school’s petition to operate as California Learning Academy. Those developments may clarify the school’s financial and operational path, while Highlands says it remains open in the meantime.
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Key Questions
Which school filed for bankruptcy?
Highlands Community and Technical Schools, a charter school with six campuses in the Sacramento area, filed for bankruptcy.
Is Highlands closing?
No closure is reported. The school remains open, and Executive Director Jonathan Raymond said the filing is intended to help it continue serving students. Its future operating arrangements are not yet settled.
How much money is being claimed?
The bankruptcy filing lists a $243 million demand from the California Department of Education and a $2.4 million claim from Twin Rivers Unified School District. Highlands disputes the charges; the filing does not establish that the claims have been proven.
What prompted the dispute?
A 2025 state audit accused Highlands’ leadership of misstating attendance and raised concerns about teacher qualifications, hiring, contracting and spending. The school says it addressed 18 of 19 recommendations and appealed the remaining one, concerning alleged misuse of funds.
What happens next?
A bankruptcy hearing is scheduled for Thursday. A ruling on the school’s administrative appeal is also expected soon, while the Sutter County Board of Education has not yet ruled on Highlands’ separate charter petition.
Source: rss
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