EC English's Canadian schools bankrupt with more than $36 million in liabilities

EC Vancouver Language Centre Ltd. and EC Toronto Language Centre Ltd., the Canadian operations of international language education provider EC English, have entered bankruptcy following the group's abrupt closure of its worldwide schools in September, leaving the two Canadian entities with combined liabilities exceeding $36 million and only a fraction of that amount in reported assets.

The companies' statements of affairs disclose approximately $19.7 million in liabilities at Toronto and $16.8 million at Vancouver, against estimated assets of approximately $28,125 and $20,153, respectively. Neither statement identifies any material secured indebtedness. Instead, the creditor schedules show that the overwhelming majority of liabilities are owed to other companies within the EC group.

EC English, founded in Malta in 1991, operated an international network of language schools offering English-language instruction to students from around the world. Before its collapse, the group operated 25 schools across seven countries, including its Canadian locations in Toronto and Vancouver. At its peak in 2019, the business reportedly served approximately 50,000 students annually through its adult and junior programs.

The company's difficulties became public on September 10, when EC informed education agents that it could not accept students scheduled to arrive at its schools that weekend. On September 14, chief executive Andrew Mangion announced the immediate cessation of teaching and trading across the group, citing challenging financial conditions and an unsuccessful effort to secure additional investment.

The closures followed a prolonged downturn in the international English-language education market, compounded in Canada by changes to international student policies and restrictions affecting foreign enrolment. EC had already begun reducing its international footprint, including plans to close its Montreal location at the end of September. The Canadian shutdown affected approximately 375 students enrolled at the Toronto and Vancouver schools, according to industry reporting, with Languages Canada coordinating transfers to alternative institutions.

The financial statements filed in the Canadian bankruptcies reveal the extent of the group's internal indebtedness. Toronto lists approximately $8 million owed to EC English Holdings Ltd., $7.2 million to EC Vancouver Language Centre Ltd. and $2.9 million to Centre de Langues EC Montreal Ltd., together accounting for more than $18 million of its reported liabilities. Vancouver, in turn, lists substantial amounts owing to other EC entities, including EC English Holdings Ltd., EC English Malta Ltd. and Centre de Langues EC Montreal Ltd. 

The two companies have little realizable property available for creditors. Their statements of affairs identify principally bank deposits, leasehold improvements and computer equipment. The figures are estimates prepared by the debtors, rather than verified recoveries, and the creditor claims remain subject to review by the trustee.

The shutdown also left outstanding employee obligations. In an FAQ circulated to Canadian staff, EC stated that September 18 would be the final day of employment for all Canadian employees. The company addressed outstanding payroll, accrued vacation and severance claims, directing employees to the federal Wage Earner Protection Program for eligible amounts. Health benefits were scheduled to terminate on September 30.

The bankruptcies follow the September collapse of the International Language Academy of Canada (ILAC), another major operator in the Canadian language education sector, underscoring the financial pressure facing private institutions dependent on international student enrolment.

Grant Thornton is the bankruptcy trustee.