Sacramento Charter School Files for Bankruptcy Amid $180 Million State Audit Dispute

Highlands Community and Technical Schools, a Sacramento-area charter that educates roughly 2,000 adults, has filed for bankruptcy after negotiations over a disputed $180 million misspending claim collapsed. The Chapter 11 petition lists thousands of creditors, notably the California Department of Education demanding $243 million and Twin Rivers Unified School District seeking $2.4 million, both of which the school disputes.

The case stems from a 2025 state auditor report that alleged falsified attendance numbers, hiring of unqualified staff, nepotism, and extravagant expenses such as a $1.2 million stay at the Grand Hyatt in San Diego and trips to Paris and Hawaii. While the school has replaced senior staff and is addressing most audit recommendations, it continues to pursue a relocation to Sutter County under a new charter name, California Learning Academy, awaiting a decision from the local board of education. A bankruptcy hearing is scheduled for Thursday.