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Atlanta’s John Marshall Law School may have found a savior in Argosy Education Group Inc. Argosy, a public company traded on the NASDAQ and a for-profit provider of graduate education, purchased the law school last week, according to Jack Sites, interim dean at John Marshall. Argosy acquired the school in exchange for assuming existing debt and liabilities of about $4.5 million, says Michael C. Markovitz, chairman and CEO of Argosy. No money changed hands, he said. Argosy and John Marshall have been linked since August 1999, when the school, then struggling to stay afloat financially after failed attempts to gain ABA approval, signed a management agreement. Sites says Argosy has invested more than $3 million in the school. For John Marshall, the sale to Argosy means financial security after years of uncertainty and scrambling for funds from real estate deals, stock investments and alumni donations. According to Argosy’s most recent 10-K, filed with the SEC in November, the company had assets of $36.68 million as of Aug. 31, 2000. It also means that the nonprofit school, founded in 1933, will become a for-profit entity. Sites says Argosy’s first priority is to secure American Bar Association accreditation for Marshall. The school has failed three times and must get at least provisional accreditation by August 2003, or John Marshall students will not be allowed to take the Georgia bar exam. The school historically has focused on underserved populations — part-time students, adults, career-changers and minorities. Sites says ABA accreditation will allow John Marshall to pursue traditional students as well. “If we achieve ABA accreditation, there will be a larger potential market of students and we will be sensitive to all of those options, but will not abandon the historic mission of the school,” he says. John Marshall’s current board of directors will continue to govern the school, according to Sites. Argosy’s Markovitz chairs the seven-member board. Other members include former Yale University president Benno C. Schmidt Jr. and Harold R. Banke, former chief judge of the Georgia Court of Appeals. Sites says Argosy had planned to wait until the school was accredited to purchase it, but the ABA expressed concern about the school’s financial health, and the public questioned whether Argosy was serious about supporting the school. To show its commitment, Sites says, Argosy purchased the school. According to Sites, Argosy waited “because it would have an impact on our finances and an impact on the [Argosy] shareholders.” That impact shows up in a restatement of Argosy’s financial statements. The restatement reduces fiscal 2000 net income from continuing operations to $1.7 million, or 25 cents per share, from the originally reported $3.1 million, or 48 cents per share. First quarter 2001 net income from continuing operations will be restated to $500,000 or 8 cents per share, from $900,000 or 14 cents per share. According to information from Argosy, the restatements primarily involve adjustments to reduce the carrying value of Argosy’s advances to John Marshall, and to treat them as equity investments, retroactive to the initial date of Argosy’s management agreement with the school. At the same time Argosy bought John Marshall, it also completed a previously announced purchase of Western State University College of Law in Fullerton, Calif., and The Connecting Link, a Duluth-based, privately held provider of continuing professional education for teachers of grades K-12. Argosy, which is based in Chicago, also owns and operates the American Schools of Professional Psychology, the University of Sarasota, the Medical Institute of Minnesota and PrimeTech Institute. Together, the schools have 19 campuses in nine states and Ontario, Canada.

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