Monday, February 1, 2016

Moody’s Downgrades California Western School of Law Bond Rating and Withdraws Vermont Law School’s Ba1 Rating For Business Reasons

Cal We$TTTTern Flushed!: On January 25, 2016, Moody’s published an item labeled “Rating Action: Moody’s downgrades California Western’s bonds to Baa3; outlook negative.” Enjoy the following portion:

“Moody's Investors Service has downgraded the rating on California Western School of Law to Baa3 from Baa1 reflecting materially worse than previously projected operating deficits. Operating pressure is likely to continue for a period longer than expected, leading to deterioration of spendable cash and investments. 

The investment grade Baa3 rating is supported by the school's ample financial resource cushion to low amount of debt, conservative debt structure with good headroom on covenants, very healthy liquid reserves relative to similar rated peers, and stabilization of enrollments for this tuition dependent school. 

Rating Outlook

The outlook remains negative based on weak prospects for net tuition revenue growth, our expectations that the school will continue to draw down on its reserves to support its rightsizing efforts and that operating performance will remain pressured in the near term. 

Factors that Could Lead to an Upgrade

Sustained improvement to student demand including growth in net tuition revenue 
Multi-year trend of improvement in operating performance 

Factors that Could Lead to a Downgrade

Failure to meet projections for FY 2016 or failure to reduce deficits starting FY 2017
Greater than expected decline in liquidity
Declining enrollment” [Emphasis mine]

Don’t worry too much. The pigs will make sure to keep enrolling waterheads and those with borderline functioning IQ. Perhaps they will start recruiting from California halfway houses, mental institutions, and homeless shelters.

VermonTTT Law School Gets Power Flushed: On January 28, 2016, Moody’s posted a gem that was entitled “Rating Action: Moody’s Withdraws Vermont Law School’s Ba1 rating for business reasons.” Here is the substantive segment:

“Moody's Investors Service has withdrawn Vermont Law School's Ba1 rating on its Series 2011A bonds. 


Moody's has withdrawn the rating for its own business reasons. Please refer to the Moody's Investors Service's Policy for Withdrawal of Credit Ratings, available on its website,” [Emphasis mine] 

That can’t be good news for a free-standing law school. Keep in mind that this trash pit has already experienced cutbacks to staff, as well as handing out faculty buyouts.

Other Coverage: The Washington Post featured a Jeffrey J. Selingo article, headlined “Three predictions about the future of legal education” – on January 27, 2016. Focus on the information below:

“Law schools are in deep trouble. Moody’s downgraded the California Western School of Law and gave the free-standing private law school in San Diego a “negative outlook,” adding that its financial pressures are “likely to continue for a period longer than expected.” 

California Western is not alone in its struggles. Fewer students are going to law school and fewer graduates are obtaining the jobs that they went to law school to get.

During the past decade, the number of law schools increased by 9 percent, to 204, according to Moody’s, while the number of new students hit its lowest number since 1973, when there were just 151 law schools. 

What’s more, the American Bar Association, which collects data on job placement, found that for the Class of 2014, just 60 percent were employed in long-term, full-time positions that require them to pass the bar nine months after graduation. 

“The legal industry is experiencing a fundamental shift rather than a cyclical trend,” Moody’s said in a recent report about law schools. 

But it seems everyone is aware of the changing (and depressed) job market for lawyers except for the people running law schools.” [Emphasis mine]

Apparently, the thieving “educators” are the last to know about the GLUTTED lawyer job market in the U.S. Then again, this is due to willful ignorance.

Conclusion: Both of these schools are steaming piles of rancid excrement. As you can see, US “News” & World Report ranks California We$TTTTern Sewer of Law as a FOURTH TIER TRASH CAN. However, USN&WR rates VermonTTT Law $chool as the co-122nd greatest, most amazing and wonderful law school in the entire country. Have fun trying to improve your bond ratings, bitches! Sadly, mental midgets will keep applying to, and enrolling in, these filthy, decrepit commodes.


  1. With some schools in financial trouble (even with the feds throwing all that money at them), the shake-out cannot be far behind.

  2. The government could give out 15 years of UBI instead of having law school. How ridiculous. At least the UBI would likely find its way back into the economy, and who knows, some of these people might actually do something really productive, start businesses or really anything.

    Instead, the money gets funneled to academics and bankers.

    There is no reason for student loans. None whatsoever. If the degrees are so valuable, have the schools work out payment plans with their students directly. Something like 10% of salary for 10 years...which sounds eerily like PSLF.

  3. I don't want to beat a dead horse, but I believe Cal Western School of Law is not even ranked anymore.

  4. By some stroke of luck or bad karma from a past life, I happen to know four girls attending one of these unranked sewer pits. One is an alcoholic turning tricks on the side, another one is a troll from Mordor, the third is a chain smoker without a clue, and the last one is...well, I am still trying to figure out what the hell she is (I'm only assuming it's a "she" because of what I think was a smudge of lipstick on her mouth; but then again, I could be wrong). Needless to say, where on earth are these poor creatures going to practice law is beyond me. My money is of course on the prostitute, at least she's got a marketable skill.

    1. Would you want them to practice law?

    2. Old guy, they're better qualified to be in an episode of the X-files.

    3. I was on the subway once on the way to my crappy doc review gig, and saw a group of young people that were talking about law school. There were 3 nerdy looking guys and 1 very attractive young woman. Apparently they were talking about going to New York Law school, not to be confused with NYU, this was a total shithole.

      I considered saying something but didn't. The only one that looked at me and looked friendly was the girl, but I figured she would be fine no matter what she did. I sort of felt sorry for the 3 guys, but I was pretty sure they wouldn't listen to me.

    4. 10:09, It's difficult to offer them guidance. I have tried myself with very poor results. Believe me, you never know what's really going on underneath. Women specially are experts at concealing their true feelings and problems. That very attractive woman riding the subway with those three guys could in reality have some serious family issues, mental conditions, financial difficulties, etc. that you would never know about by just talking to her casually. Those extra $160,000 in student loans and a questionable legal education in a saturated job market could be too much for her or anybody to bear. We can only hope they do their due diligence and everything works out at the end.

    5. 6:26:

      I too have tried giving advice, with poor results-I think 100% failure, so far.

      None of them have said, but I suspect THEY wonder what is wrong with ME.

      Must be they think I am so stupid I have learned nothing in 40 years of solo practice.

      Gotta run...tide to be swept back...

  5. Captain Hruska Carswell, Continuance KingFebruary 1, 2016 at 11:54 AM

    ValuJet after the crash of Flight 592 into the Everglades in 1996 became Air Tran which was purchased by Southwest. Same thing will happen here...Nobody flew ValuJet because of a terrible record. But the owners were money grubbing pigs and managed to continue flying. They still want to be in the MONEY GAME....the hell with passengers we'll let insurance sort that out. The hell with law students, we'll let the taxpayers sort that out...

  6. At the risk of sounding overly optimistic, could this finally be it, the end of the TTT gravy train? Moodys has put the world on notice that these TTTs are in bad financial shape, so anyone investing in them is taking a huge risk. TJ got bailed out, but with the bad news mounting, it's unlikely that there are other investors willing to take such a risk. It only takes one TTT collapse to start a panic among investors, with a massive rush to the exits. Here's hoping.

    1. Thomas Jefferson is still circling the drain. Far from being bailed out by investors, it merely stung the bondholders with a fat loss.

      I don't think that this is the end of the TTT gravy train by a long shot, but I do think that we'll see more closures. Indiana Tech and Charleston are among the most likely to disappear.

    2. Captain Hruska Carswell, Continuance KingFebruary 3, 2016 at 8:52 AM

      Old Guy,

      I respectfully dissent. Both of those institutions have tremendous community support. Have you ever visited Indiana? It's basically a flat dump of Walmarts, Jails, Diabetes Clinics, pay day loan stores, pawn shops and an outbreak of HIV since the forced closure of Planned Parenthood. A brand spanking new law school is a thing to CELEBRATE. It is intellectual hope out of dystopian bleakness and despair. They will fight like hell for an institution of higher learning. The politicians will get behind this thing and save it.

    3. Well, ever since it opened I've heard that IT is "circling the drain." Well, it's still open, still enrolling the clueless(as it's still not accredited).
      What needs to happen is for one of these TTTs to actually close. When that happens, the investors will rush to the exits and make the mortgage debacle look like an orderly transition. But...none have closed; not one. It's going to take a closure before any substantive changes in the scam.

    4. And yes, the ABA has decided to recommend provisional accreditation for IT.

  7. Captain Hruska Carswell, Continuance KingFebruary 1, 2016 at 4:22 PM


    How did you get this picture of the ladies' powder room? Did you hide a camera in there? Are you going to need the assistance of counsel for your defense? I give you a break on fees because I know you, Old Guy, Dybuk are all in the same position as me...a schlepper attorney with limited connections...screwed by these Law Deans...

    1. Dybbuk and I are doing rather better than that, I'm glad to say.

  8. Pictured above is a relatively-upscale commode compared to what most TTT-ers are accustomed to. Given the fact many terleteers have ended up actually using public restrooms to wash and dress, it can be important.

    This classes up the place. Very good.

    1. that is the best comment of the night thanks for

  9. Right-sizing, my ass. The right size for California Western is zero.

  10. It is all an agonizingly painful soap opera in slow motion:

    "As the Onion Peels."

    It will come apart layer by layer to a point where things will stabilize, and then…

    Well, I am reminded of Churchill's Theme of vol. 6 of his Second World War:

    How the Great Democracies (surviving top tier law schools avoidance of well-deserved disaster)
    and so
    Were able to Resume
    the Follies
    Which Had so Nearly
    Cost Them Their

    I anticipate a number of marginal schools actually closing, merging, or, like Carthage, being razed and the earth salted, but most will simply breath a sigh of relief and "soldier on."

  11. Fuck. Adult bookstores have a higher Moody's rating than these two shitholes.

  12. California Western charges a mere $47,260 per year for tuition, and Vermont Law Skule only $47,983. What a value, compared to $58k for Harvard and Yale!

    1. Not only are those schools cheaper, but no matter the school you attend you'll be the beneficiary of a million dollar JD premium, per the S&M study. Choosing Cal Western or VLS over Yale is a no-brainer!


    From 'The Big Short'. They go over the mortgage bond ratings. The guy even mentions that Bs and BBs are dogshit. (Like a TT law degree is dogshit.)

    Look at Moody's bond ratings on the right. You can see which ones are dogshit.

    1. In other words, Cal Western is a hair away from being considered junk bond investment grade. I hope they can continue recruiting all those dumb asses from fly-over states, military personnel and foreign students.

    2. Baa3, baa3, black sheep, have you any wool?

  14. Can someone please post the email address to use to submit confidential information to Nando? I've seen people say that it's available on the website, but I have never been able to find it. Thank you.

  15. I don't understand the article below:

    -Are Lawyers Getting Dumber?-

    Admissions standards have slipped for most law schools and minorities are getting their slice of the pie, (Finally - as they count for a large number of below standard student... the lsat is a joke...).

    Just maybe minority lawyers with low admissions stats can complete legal task just as good as the dominant higher stat scoring law students / lawyers.

    Since the criminal system is comprised mostly of minorities. I saw we band together to keep our money in our perspective communities for legal council needs and only hire people that like us.

    In the end AAMPLE has tossed this way of thinking on its head. equal opportunity for everyone, test should not hold anyone back.

    Old Guy - Are you with me on this one?

    1. Not understanding articles in Bloomberg is a common feature of law school students today.


    On January 29, 2016, JDU poster “ichininosan” started a thread labeled “Vermont Law [School]s] bonds…” Enjoy this sampling of comments:

    “ichininosan (Jan 29, 2016 - 1:46 pm)

    which Moody's downgraded to a Ba1 rating ("non-investment grade" aka "junk bonds") in 2014 have had that rating "withdrawn" for "business reasons."

    I'm assuming this is not because the revenue outlook for Vermont is improving. According to the school's ABA disclosures, in 2010, there were 203 of 607 students that paid the full sticker price, meaning total tuition revenue was somewhere in the $21 million ball park. Last year, only 31 of 424 students paid full price, so revenue is down to about $12 million.

    Of the other side of the ledger, the school's 2012 IRS filings show employee expenses of $17.6 million and "other expenses" of $11 million. Not a healthy enterprise.
    braindamagedprophet (Jan 29, 2016 - 1:51 pm)

    That bls job forecast needs more publicity to drive attendance down even more. Ideally, law schools need to be graduating under 20k, there is a lot way to go.
    heythere (Jan 29, 2016 - 9:17 pm)

    Not sure how to read between the lines on this.


    Business Reasons: under certain circumstances, MIS will withdraw a Credit Rating for a Rated Entity or an obligation for reasons unrelated to the situations identified above. When MIS indicates that a Credit Rating was withdrawn for “business reasons,” this refers to MIS’s business reasons, not the business reasons of the Rated Entity or obligor. MIS’s business reasons generally do not reflect any concerns about the Rated Entity’s creditworthiness or the quality of its management. MIS’s decision to withdraw a rating under these circumstances will attempt to balance the informational benefit to market participants from maintaining a Credit Rating against the resources required to maintain and monitor that Credit Rating or other business considerations.
    bigsal (Jan 29, 2016 - 9:35 pm)

    Maybe they at the law school are trying to buy their way to a better rating?”

    Basically, you can now wipe your ass with a degree from Vermont Law Sewer – as well as with its bond rating. In a just world, this dung heap would be torn down – brick by brick – and turned into a damn petting zoo.

    1. Nando, please, petting zoos serve a higher academic purpose.

    2. A petting zoo? Good idea. The place has plenty of sheep, swine, and jackasses to contribute.

  17. What is Thomas Jefferson's bond rating?

  18. I wonder if lawyers that enter practice from low admissions law schools will be just as good as their counter parts. Or will this lead to an increase in malpractice, and harm to the public, thus painting all lawyers as incompetent.

    I guess the average layman would know the difference and would mostly focus on results.

    1. There is one guy in my jurisdiction that graduated from Marshall within the last few years and was disbarred after a 500K malpractice judgment was entered against him neglecting his teacher clients in their federal law suit and for converting client funds.


    On February 2, 2016, the ABA Journal published a piece from Debra Cassens Weiss, under the headline "Moody's downgrades rating of California Western School of Law." Here is the full text of that article:

    "Moody’s Investors Service has downgraded the bond rating on California Western School of Law in San Diego to reflect “materially worse than previously projected operating deficits.”

    Moody’s downgraded the stand-alone school’s bonds from Baa3 from Baa1, according to a press release. The Washington Post reports on the negative outlook for the school in a story noted by Above the Law and TaxProf Blog.

    Moody’s says the negative outlook partly reflects “expectations that the school will continue to draw down on its reserves to support its rightsizing efforts.” The bond rating agency notes, however, that the school has an “ample financial resource cushion to low amount of debt” and “very healthy liquid reserves.”

    Moody’s has noted troubling times for law schools, according to the Washington Post. During the past decade, the number of law schools increased by 9 percent while the number of new students reached its lowest point since 1973, Moody’s said in a law school report."

    Keep drawing out of your reserves, bitches. In the meantime, have fun enrolling students with full scale IQs of 85, you slimy cockroaches.

  20. What a great profession:
    and if they had just listened to Nando:
    "The study found that younger attorneys in the first 10 years of practice exhibit the highest incidence of these problems compared with their older counterparts."


    Back on April 13, 2013, dybbuk posted an OTLSS entry labeled “California Western School of Law is going to the dogs.” Enjoy the full text below:

    "Can you mock something and approve of it at the same time? This photo depicts Neils Schaumann, President and Dean of the California Western School of Law, petting a dog. The photo appears on the "events calendar" of the California Western School of Law site and is meant to promote the school's Student and Diversity Services' "Law Dogs on Campus" event on April 15th. The California Western site urges law students to "[t]ake a finals study break and spend some quality time with trained therapy dogs."

    I think this is a good idea. Therapy dogs have proven their value in providing comfort to persons suffering from anxiety or post-traumatic stress. The dogs selected to be trained as therapy dogs have particularly patient and affectionate dispositions, as the picture illustrates. Though, given that the animal depicted on the left is a fourth-tier law school dean, it is to be hoped that the animal on the right has recently gorged on beef liver and suffers from a temporarily inflamed bowel.

    I expect that the California Western law students will get stress relief from petting these dogs, just as promised. So congratulations, without irony, to California Western Law School Student and Diversity Services for hosting a worthwhile event.

    The dogs don't care that California Western School of Law is a bottom-of-the-barrel law school, one of the 57 out of 201 ABA accredited schools that US News & World Report did not bother to rank.

    The dogs don't care that the average graduate of the California Western School of Law is carrying an incredible law school related debt of $167,867, which is the second highest debt level among the 201 ABA accredited schools-- a debt level calculation, incidentally, that excludes undergraduate educational debt, and interest accrued thereon.

    The dogs don't care that the employment prospects of California Western law grads are dismal. Only 40.3% of the graduating class of 2012 obtained bar-required, full-time, long-term, non-solo jobs within nine months of graduation, and only 36.5% obtained such jobs in 2011. For both years, California Western's placement record was among the 40 worst of the 201 accredited law schools.

    The dogs don't care that California has had a severe and recurring budget crisis for several years, so that the chances of a recent law grad obtaining a state public sector job remain worse there than elsewhere, which is saying a lot. Indeed, out of the 568 total members of California Western's graduating classes of 2011 and 2012, a mere 33 obtained a full-time judicial clerkship (at any level) or a full-time government job within nine months of graduation.

    The dogs don't care that California has an unusually difficult bar exam.

    The dogs don't care, but these points combined are likely to have a catastrophic impact on a graduating California Western law student's prospects in the human world." [Internal citations removed]

    In sum, a degree from California Western Sewer of Law is worth about the same as a pile of moist dog excrement. Yet, you will be expected to piss away three years of your life – and incur roughly $180K in NON-DISCHARGEABLE debt – for this garbage product. Yes, what a great deal for the student, right?!?!


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