Highlands Community and Technical Schools, a Sacramento-area charter school currently awaiting a decision on a new charter in Sutter County, filed for bankruptcy in U.S. District Court for the Eastern District of California on Sunday. The filing comes after the school stated negotiations broke down concerning the repayment of a debt the state claims is owed.
Despite the bankruptcy proceedings, Highlands Community and Technical Schools, which serves approximately 2,000 adults across six campuses in the Sacramento area, remains open. Jonathan Raymond, the school's executive director, issued a written statement explaining that the school is taking this step "to protect our students and preserve the future of our schools." Raymond further stated that the reorganization process offers the best opportunity for the school to remain operational and continue serving students while it addresses disputed financial claims through a court-supervised process.
The school's petition to relocate and operate under a new name, California Learning Academy, within Sutter County remains under consideration. The Sutter County Board of Education is expected to rule on this petition. Previously, the Yuba City Unified School District denied the school's charter request in July.
According to the bankruptcy filing, Highlands Community and Technical Schools has between 1,000 and 5,000 creditors. Among these are the California Department of Education, which is demanding $243 million, and Twin Rivers Unified School District, the current holder of Highlands' charter, which states it is owed $2.4 million. Highlands disputes these 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.
The allegations against Highlands Community and Technical Schools stem from a 2025 California State Auditor report. This report accused the school's leadership of misstating attendance records, resulting in the collection of state funds for students who reportedly did not exist. The auditor also alleged that the school hired unqualified teachers and engaged in nepotism in both hiring practices and contracting. The audit detailed other questionable expenses, including $1.2 million spent at the Grand Hyatt Hotel in San Diego and payments for board trips to Paris and Hawaii.
Raymond stated that Highlands has since addressed 18 of the auditor's 19 recommendations. The remaining recommendation, pertaining to the alleged misuse of funds, has been appealed by the school. An administrative law judge is anticipated to issue a ruling on this appeal soon. Since the audit's findings, Highlands has replaced all of its senior staff and is in the process of replacing unqualified teachers with individuals who possess or are actively working towards the required credentials, according to Raymond.
Founded in 2014, Highlands Community and Technical Schools serves adult students seeking to earn a high school diploma, take English classes, or develop job skills. Many of its students are immigrants.
A hearing on the bankruptcy filing is scheduled for Thursday, while the administrative law judge's ruling and the Sutter County Board of Education's decision on the new charter are both pending.
