Rider Could Lose Millions On Westminster Sale, Report Says

The sale of the Westminster Choir College (WCC) to Beijing Kaiwen Education Technology Co., Ltd. could end up costing Rider University between $5 million and $13 million, according to a new study released by one former and two current university professors.

The report points to an unbalanced sheet for last year from Kaiwen, which shows 934 million Yuan in liabilities compared to 178 million Yuan in cash and other currencies, the Princeton Packet reports. The company reported a net income of 23 million Yuan.

Rider also faces a lawsuit from Princeton Theological Seminary, would have to give up about $20 million, which is the value of WCC’s endowment, and pay $1 million to consultants who helped shepherd the sale. A common practice in business transactions is to negotiate the sale price at 20 to 40 percent below the asking price of $40 million. All this may result in a loss for the university, according to the report.

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The sale was to take place in June, but it was previously reported that would not happen, and the university is expecting to keep possession of the college into the next academic year. Kaiwen must first become accredited and licensed to operate the college before it can take over, and no new timeline for the sale is in place.

The Chinese firm has no experience operating institutions of higher education, and has only been operating schools since 2016. It believed that Kaiwen may be purchasing the land with the intent to close the college and converting the land and buildings for other purposes. In its announcement, Kaiwen stated that it is purchasing the college to increase its own profitability.

Kaiwen's qualifications for running the college was among the issues Rider Chapter of the American Association of University Professors raised in its opposition to the sale following the announcement.

The Rider chapter of the American Association of University Professors is a union that has challenged the sale and the validity of the announced layoffs that came shortly after Rider announced it would sell the college.

See related: Rider Sells WCC To Chinese Company For $40 Million

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