Dream Center Will Stay in Receivership — for Now

The tattered remains of what was once Dream Center Education Holdings will continue to be administered by a controversial receivership, a federal judge has decided.

AP Photo, Matt Rourke

Until the college chain imploded on Friday, Dream Center owned Art Institute and Argosy University campuses around the country. Those colleges had long operated as for-profit universities until Dream Center — a Christian nonprofit — purchased them more than a year ago.

Dream Center entered receivership in January as its financial problems mounted. The court-appointed receiver, Mark Dottore, has been criticized by student groups for failing to do enough to protect the tens of thousands of students who attended Dream Center campuses. In recent months, Dream Center improperly kept millions of dollars in financial-aid money that belonged to students. Dottore has denied any involvement in the wrongdoing.

On Monday the U.S. Department of Justice joined the anti-receivership chorus, and asked a federal judge to move the now-defunct college chain to bankruptcy court.

But Judge Dan Aaron Polster is allowing the receivership to continue for now, following a hearing on the matter on Monday. A key reason: Some former Dream Center campuses continue to operate under new ownership, and Dottore argued to the judge that, as receiver, he is working to keep those campuses afloat as they transition to the new owners.

Dottore did not immediately return a phone call seeking comment.

The National Student Legal Defense Network, which had fought to remove the receivership, said it would “continue fighting in court to protect the rights of students who were harmed by this company’s deception.”

Michael Vasquez is a senior investigative reporter. Follow him on Twitter @MrMikeVasquez, or email him at michael.vasquez@chronicle.com.