Students stunned by Geos bankruptcy

Thousands of students were caught off-guard and could be left out of pocket by the collapse of Geos Corp. on Wednesday, with many unaware the major English conversation school was in financial straits.

“I paid 300,000 yen-plus in February for annual tuition. I was concerned as Nova had collapsed a while ago, but I didn’t expect Geos would also go belly-up,” a company employee in his 20s said at the Jiyugaoka branch in Meguro Ward, Tokyo, referring to the major conversation school that went bankrupt in 2007.

A 22-year-old student who arrived at the Sangenjaya branch in Setagaya Ward said she paid 250,000 yen in annual tuition in mid-March.

“The school insisted that I pay it in a lump sum,” she said wistfully.

Geos started bankruptcy procedures Wednesday at the Tokyo District Court, which ordered its assets protected from creditors. The firm grew rapidly on the English conversation learning boom, but its finances worsened recently.

Flanked by a lawyer, Geos executive Hitomi Suhara announced at a press conference Wednesday that Geos had applied to the court to start bankruptcy procedures.

Geos founder and president Tsuneo Kusunoki did not attend the conference.

Suhara said it would be “rather difficult” to refund students who had paid their tuitions in lump sums because the firm’s financial condition “isn’t very good.”

A 43-year-old woman of Chofu, western Tokyo, arrived at the Geos’ Sengawa branch in Chofu on Wednesday afternoon after hearing of the bankruptcy.

“This is the second time this has happened to me [following Nova],” she said. “All I can do is laugh at my bad luck.”

She began sending her son, a fifth-grader, to the branch last year and paid more than 200,000 yen for annual tuition. However, he has so far attended classes worth less than half of the tuition.

As the woman was left out of pocket after paying more than 600,000 yen in a lump sum to Nova before it collapsed, she paid Geos in a smaller installment.

“I’m anxious as I don’t know if [my son] can go to another branch in the neighborhood,” she said. “He got along well with his instructor. It’s such a shame.”

A 28-year-old American instructor at the Tsu branch said he was informed about two weeks ago by Geos that his school would be shut down and it could not guarantee his salary for this month would be paid.

He was also told it would be difficult to refund students.

“I want to get my salary, but I feel really sorry for my students,” he said.

General Union, an Osaka-based labor union for instructors at English conversation schools, said it had received many complaints from Geos instructors over salary payment delays since last summer.

Katsuji Yamahara, chairman of the union, said: “We don’t know what will happen. We’ll help [Geos instructors] over their unpaid salaries.”

According to Geos, 230 of its 329 branches nationwide will be taken over by Nagoya-based G.communication Co. Geos will ask 7,000 students at the 99 branches that will be closed to transfer to other Geos branches.

Geos has set up a toll-free number for students with inquiries from 10 a.m. until 8 p.m. through Saturday. The number is 0120-134-446.