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A beleaguered Sacramento charter school, which the state last year accused of misspending $180 million, has filed for bankruptcy after the school said negotiations broke down over its repayment of the debt.
Highlands Community and Technical Schools, which serves about 2,000 adults at six campuses in the Sacramento area, remains open.
“Highlands is taking this step to protect our students and preserve the future of our schools,” the school’s executive director, Jonathan Raymond, said in a written statement. “The reorganization process gives us the best opportunity to remain open and continue serving students while we address the disputed financial claims through an orderly, court-supervised process.”
Relocation to Sutter County?
Highlands’s quest to relocate to Sutter County also remains in play. The school is awaiting a decision from the Sutter County Board of Education over its petition for a new charter, under a new name: California Learning Academy. Yuba City Unified School District, where Highlands hoped to expand, denied the school’s charter request in July.
The school filed for bankruptcy in U.S, District Court for the Eastern District of California on Sunday. A hearing is set for Thursday.
In its filing, the school said it has between 1,000 and 5,000 creditors, including the California Department of Education and Twin Rivers Unified School District, which currently holds the school’s charter. The Department of Education is demanding $243 million, according to the filing, and Twin Rivers says it’s owed $2.4 million.
Highlands disputes the charges. The Department of Education had no comment on the matter and Twin Rivers Unified did not respond by deadline for a request for comment.
Auditor’s findings
The case stems from a 2025 California State Auditor report that accused Highlands leadership of misstating the school’s attendance, essentially collecting state money for students who didn’t exist. The auditor also accused the school of hiring unqualified teachers and engaging in nepotism in hiring and contracting. Among other questionable expenses, the school spent $1.2 million at the Grand Hyatt Hotel in San Diego and paid for board trips to Paris and Hawaii, according to the auditor.
The school has addressed 18 of the auditor’s 19 recommendations, Raymond said, and it appealed the remaining one, which is the alleged misuse of funds. The state’s Education Audit Appeals Panel is expected to release a ruling soon.
Since the audit, Highlands has replaced all of its senior staff and moved to replace unqualified teachers with those who have, or are working toward, credentials, Raymond said.
Founded in 2014, Highlands serves adults seeking a high school diploma, English classes or job skills. Many of its students are immigrants.
