Multi-State Group of Attorney Generals Investigating SSH And Its Lenders

I have been carefully following the ongoing separate and joint efforts of 16 different states to investigate SSH, its owners, and its lenders KeyBank, Student Loan Xpress, and Citibank. The Attorney General's Offices for 15 different states have joined together to form a multi-state group to investigate SSH and its lenders. The 14 states that have agreed to be part of this joint effort are Arizona, California, Florida, Georgia, Idaho, Illinois, Nevada, New York, Missouri, Montana, Oklahoma, Oregon, Texas, Utah and Washington. 2 additional states, North Carolina and Colorado, were asked to participate in this group, but have so far declined to do so. All parties to the multi-state investigation have signed on to a Common Interest Agreement agreeing to share documents and strategies. I am attempting to get permission to publish a copy of this Common Interest Agreement on my blog. I believe that as a part of this multi-state effort, one or more lawsuits will be filed by the different State Attorney Generals' Offices against KeyBank, Student Loan Xpress, and Citibank. Details of the ongoing investigations are confidential. All of this is good news for all former students of SSH. I will continue to cooperate in every way possible with all government agencies investigating SSH, its owners and its lenders, and I urge my clients to do so as well. In that regard, I wrote to Associate Attorney General Andrew Shull of the Oregon Department of Justice earlier today and gave him and his investigators permission to speak directly to my Oregon clients who attended SSH. I spoke earlier today with an Associate Attorney General in a different state who is considering writing a letter to Citibank urging it to forgive the student loans that Citibank made to students that attended SSH in that state. This is based in part on the fact that the SSH school established in that state was never licensed to operate, and is also based on the fact that Citibank failed to adequately investigate the operations of SSH.

Sue The Lenders Now Or Try To Settle First?

Sue the Lenders now or try to settle first? This is the choice that I have to make on behalf of our SSH clients. Three separate class action lawsuits have been filed against one or more of the lenders that SSH referred its students to. Pinnacle Law Group, LLP of San Francisco, California filed class actions in California and Nevada against Student Loan Express and KeyBank on behalf of students from those two states who were enrolled at SSH at the time of the SSH bankruptcy. James Harward of Salt Lake City, Utah is co-counsel on the Nevada action. Chris Casper of James, Hoyer, et al. of Tampa, Florida filed a national class action in Florida against Student Loan Express only. I am carefully monitoring all of these actions, and am in regular contact with Andrew August and Kevin Rooney of Pinnacle Law Group. These class action lawsuits face serious obstacles, including, but not limited to, pending Motions to Dismiss and a certain fight over class certification. Many of my clients are not covered by any of these class actions, which do not include in their class definitions students who obtained loans from Citibank, students who obtained loans from Student Loan Express but do not reside in Nevada or California, and all students who were not enrolled at SSH at the time of its bankruptcy filing.

In addition to monitoring the existing actions against KeyBank and Student Loan Xpress, I have been carefully researching prior actions against the lenders by or on behalf of students who attended schools that closed before they could graduate. I want to learn everything that I can about what has worked for Plaintiffs and what has not worked.

While all of this has been going on, I have initiated contact with counsel for Student Loan Xpress and KeyBank and begun my exploration of all settlement possibilities. I want to see if fair settlement agreements can be reached for my clients. These agreements would take into account the amount of education received by my clients and the amount of education that they were promised and paid for, but never received. They might also take into account the current financial condition of the student and any cosigner. Class counsel has been involved in similar discussions. I want to see what results I can achieve for my clients by way of settlement. All of us are working both separately and together in an effort to determine whether or not we can get these lenders to agree to enter into fair settlement agreements that we could all recommend to our clients. Counsel for the lenders and class counsel have asked that the specifics of these discussions remain confidential until there is something more concrete to report.

Settlement negotiations are expected to continue over the next two to three months, at which time I will be in a position to convey detailed information regarding the best specific settlement proposals that I can obtain for my clients and either recommend the acceptance or rejection of these settlement proposals. I hope to get Citibank actively involved in these settlement negotiations. If a good settlement appears to be unlikely, I will have plenty of time to institute my own litigation against the lenders. Meanwhile, I believe that my clients will benefit by my monitoring how the other litigation against the lenders proceed, and by giving more time to the various ongoing civil and criminal investigations of SSH.

Student Loan Xpress, the lender that made the most loans to SSH students, stopped writing new student loans in April and went out of business in May, 2008. My typical SSH client borrowed $69,900.00 from Student Loan Xpress to attend SSH, and incurred origination fees and high interest rates that push the total repayment amount over $200,000.00. The lenders and their counsel are well aware of the risks that their clients face, and I am well aware of the risks that each and every one of my clients faces. I ask that you all be patient during this settlement negotiation period. Please understand that not everything that I do on behalf of our SSH clients can be put on the blog. I want to help all former SSH students, but my first allegiance is always to my clients.