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Standardized Testmaker Files for Chapter 11

WILMINGTON, Del. (CN) - One month after settling a fraud lawsuit with federal prosecutors, Education Holdings, formerly known as Princeton Review, filed for bankruptcy, listing $100 million to $500 million in debts and assets.

A federal bankruptcy judge approved the Chapter 11 bankruptcy filing on Wednesday. Education Holdings is expected to borrow $4 million to $7 million while it reorganizes.

The Justice Department sued the company in May 2012 and announced a settlement in December. It accused Princeton Review of taking tens of millions of dollars in federal money to tutor children in New York City, but failing to deliver the services. The settlement could cost the company as much as $10 million.

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