BIRMINGHAM, Ala. (CN) – Clayton College of Natural Health, a Birmingham-based college offering “distance education programs,” closed without warning after 20 years of business and kept “tens of millions of dollars in advance tuition,” four students say in a federal class action. And 24 students sued a second Alabama college in a separate complaint.
The students in the class action – from Massachusetts, Michigan and Virginia – say Clayton College has “disabled [its] phones and website, vacated their offices, and informed plaintiffs and other members of the class to direct all communications to a post office box to which mail is now sent, and largely ignored.”
The class claims that Clayton and its co-defendant officers – Lloyd Clayton, Jeff Goin, William Fishburn and Kay Channell – and Magnolia Corporate Services used their prepaid tuition to pay bonuses and salaries.
They say the defendants breached their fiduciary duty by “failing to take steps to safeguard the funds, failing to ensure that tuition received from plaintiffs for educational programs was utilized for such programs, failing to properly manage and protect tuition funds, and failing to reveal to plaintiffs that the school was in financial difficulty.”
The students claim that the college has “failed to return the tens of millions of dollars entrusted by and received from plaintiffs and members of the class for prepaid distance education programs that it is now impossible to complete.”
They also accuse the defendants of conversion, fraud and negligence.
The plaintiffs are represented by Glen M. Connor of Whatley Drake.
In a similar complaint in Marengo County Court, Linden, Ala., 24 students say the National Healthcareer Association, Career 1st and Thomasina Simmons took their money for phlebotomy technician courses, but did not qualify them, as promised, to take the National Certification test for phlebotomists. The students say the defendants’ courses were inadequate and did not comply with National Healthcareer Association guidelines.
These students seek damages for fraud, breach of contract and negligence. They are represented by Ted Mann of Birmingham.