Higher Ground Education Inc., once the world's largest operator of Montessori schools with over 150 locations, has filed a pre-arranged Chapter 11 bankruptcy plan that seeks to reorganize its drastically reduced operations after foreclosures claimed the vast majority of its schools, according to a disclosure statement filed in U.S. Bankruptcy Court.
The Dallas-based education company, which now operates just seven schools following a series of creditor foreclosures earlier this year, filed for bankruptcy protection on June 17-18, 2025, in the Northern District of Texas with approximately $144.2 million in total funded debt. The company has secured support for its restructuring from major stakeholders through a Restructuring Support Agreement (RSA).
"The Debtors simply could not maintain or generate sufficient liquidity to fund operations," the disclosure statement explains, despite having raised over $335 million in funding since 2020. "The Debtors' business has never had positive cash flows from operations—resulting in the continuous need for external funding," with operating losses exceeding $440 million over the past five years.
Under the proposed plan, 2HR Learning, Inc. will serve as plan sponsor, providing $8 million in new money to fund the Chapter 11 cases and creditor recoveries. Upon emergence, 2HR would receive 100% of the equity in the reorganized company. Guidepost Global Education, Inc. (GGE) will contribute certain curriculum assets and intellectual property to the restructured business.
"The Debtors strongly believe that the Plan is in the best interests of the Debtors' estates, their respective creditors and interest holders, and that the Plan represents the best available alternative at this time," the filing states.
The bankruptcy follows a dramatic collapse of the company's operations in the first half of 2025. After defaulting on various secured loans, Higher Ground faced a series of foreclosures beginning in March 2025, when WTI (Venture Lending & Leasing) foreclosed on and sold numerous schools and substantially all of the Debtors' intellectual property to GGE for $23 million. Additional foreclosures by Learn Capital and Yu Capital entities followed in April, leaving the company with just a fraction of its former operations.
The company's downfall was preceded by significant management turmoil. Co-founders Ramandeep (Ray) Girn and Rebecca Girn resigned from all positions on February 25, 2025, followed by several board departures in March and April. By June, virtually all corporate employees had ceased working for Higher Ground and moved to GGE.
Multiple attempts to secure new financing or find strategic buyers failed despite engagement of three investment banks—Barclays Capital, Rothschild & Co, and SC&H Capital—to market the company. The disclosure statement noted that potential investors cited "continuous negative cash flows and questionable path to profitability, excessive rent costs, large balance of debt on the balance sheet, high level costs of G&A expenses, and questions about the Debtors' management" as reasons for declining to invest.
The company's debt structure includes approximately $127.3 million in secured debt, including $4.8 million in Bridge CN-3 Notes, $4.7 million in WTI Loan Agreements, and $117.8 million in CN Notes. Additionally, the company has approximately $16.9 million in unsecured funded debt.
In an unusual aspect of the plan, secured creditors have agreed to compromises that will allow distributions to unsecured creditors who would otherwise receive nothing. The plan provides that Ray Girn will receive $500,000 on account of his Bridge CN-3 claim, while other RSA parties are waiving their rights to plan distributions to ensure recoveries for unsecured creditors.
The bankruptcy court has scheduled a combined hearing on both the disclosure statement and plan confirmation for September 3, 2025. Creditors eligible to vote on the plan must submit their ballots by August 25, 2025.
Higher Ground Education was founded in 2016 with the mission to "modernize and mainstream the Montessori education movement." The company experienced rapid expansion, particularly after COVID-19 lockdowns ended, offering "an end-to-end experience that covered the entire lifecycle of a family at school—virtually and at home—from birth through secondary education."
The case is being heard by Judge Michelle V. Larson in the U.S. Bankruptcy Court for the Northern District of Texas (Case No. 25-80121-11). The debtors are represented by Holland N. O'Neil, Timothy C. Mohan, Nora J. McGuffey, and Quynh-Nhu Truong of Foley & Lardner LLP.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 92 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.