Third Status Report – September 20, 2005

September 20, 2005

THIRD STATUS REPORT

Here is a short update on the HICP case.  As you may have been aware, a series of settlement discussions took place in August presided over by a different judge.  At the time the talks were scheduled, no request for a jury trial had been made.  Because Judge McKenna was to be the judge deciding the case, she could not participate in the settlement discussions. This is stardard operating procedure in our courts.  Nothing came of the settlement talks and no further talks are scheduled.

On September 1, the attorneys representing PES, Monroe and Criswell filed a formal answer to the lawsuit in which they essentially denied responsibility.  In addition they requested a jury trial.  The defense attorneys have subsequently withdrawn from the case.  This means that the defendants will either have to obtain new counsel or represent themselves pro se .

On September 16 the court approved our request to have Benjamin Fujimoto and Rebecca Yee appointed as receivers for the assets of PES, Monroe and Criswell.  Mr. Fujimoto and Ms. Yee have served as receivers in other matters here in Hawaii and their role will be two-fold:  first, to locate, secure and sell whatever assets may be remaining and (2) to assist us in determining where the student’s tuition money has gone.

Since the lawsuit was filed, we have been locating and obtaining documents from many sources, including banks, the accrediting agency and others.  For the next several months we will gather and analyze additional documents, take sworn statements from witnesses and otherwise prepare to move the case towards conclusion.  As a part of that process we will attempt to discern where your tuition money was spent and whether any more of it can be recovered from the defendants or third-parties.  This will be a time-consuming process taking many months. There are no hearings currently scheduled in court.

The First Circuit Court has a searchable online database for cases.  You may access it at http://hoohiki2.courts.state.hi.us/jud/Hoohiki/main.htm .  Under Search option 2, type in “Pacific Educational” under the business name.

Again, if you move, please keep us up to date with your address change so that we can keep you informed on important events.