A number of state and federal agencies are objecting to the broad releases of liability in defunct for-profit college operator Corinthian Colleges Inc.'s chapter 11 liquidation plan ahead of a bankruptcy court hearing on Wednesday to consider approval of the proposal, Dow Jones Daily Bankruptcy Review reported today. Corinthian's proposed plan says that student creditors and general unsecured creditors are receiving payment "in full and final satisfaction and settlement" of their claims. The plan provides for the establishment of two trusts, each containing a piece of what's left of Corinthian's assets, to pay the two creditor groups. The U.S. Department of Education said in court documents on Friday that the plan language amounts to a release of liability for Corinthian Colleges, which is still facing lawsuits from state and federal agencies regarding the company's allegedly deceptive marketing practices to students, among other issues. Corinthian has denied wrongdoing in these lawsuits.
