Grad Nights company to file for bankruptcy, leaving 2020 grads out thousands

Grad Nights company to file for bankruptcy, leaving 2020 grads out thousands
The Coronavirus pandemic has meant the Class of 2020 has had to end their high school years at home, and miss out on sporting events, proms, and graduations. Now many are learning they won’t get their money back for some of those canceled events, either. (Katie McDowell/KIRO 7)

It’s nearing the end of the year for most high school seniors. What’s supposed to be an occasion marked by the pomp and circumstance of formal dances and graduations has fizzled into weeks of isolation and missed milestones.

And now, another disappointment: canceled graduation night parties, and denied refunds.

“We just wanted them to feel recognized for everything they have done and know that it hasn’t been an easy road,” says Lori Macauley, one of several parents in Kent coordinating a party for their seniors.

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The Kentridge High School group paid a Lynnwood-based company called Grad Nights, which is part of the Howard Group, more than $20,000 to host their event. That’s about $175 per student.

But when the Coronavirus pandemic hit, the party – which is held immediately after the school graduation ceremony – could not happen because of social distancing rules.

“To have it all stripped away is hard to wrap our heads around at first, and it still is. Not that it makes it any easier,” says Lori’s son, Joey Macauley.

So, Lori’s group asked the company for a refund.

“At that point, that’s when we heard that they do not have our money and they cannot provide us refunds right now. And they used our money for business operations expenses during the year,” says Lori.

The company did offer to put the party on later in the summer, if government rules allow large events, or over winter break.

“Talking to our parents and seniors, there’s not a strong interest,” says Lori. “Plus, we don’t know if the kids are going to be around in those time frames. But to come back for a chaperoned high school activity isn’t what a lot of the kids were looking for.”

We’ve heard from parents across the Puget Sound region who have told similar stories. Ann Southard, who is with the booster club from Steilacoom High School in the south Sound, is one of them.

“At this point we’re almost six thousand dollars out of money and it doesn’t seem to be very fair,” says Ann.

The company’s lawyer responded to Lori’s inquiry about a refund for Kentridge students by adding this, in an email:

“It is possible that the company can avoid filing for bankruptcy reorganization, but that will depend in part on how aggressively parent groups demand payment.”

“It felt like a threat: if we push too hard and try to do what’s right for our kids, they’re going to file for bankruptcy and then we’re stuck,” says Lori.

We had University of Washington law professor Jane Winn look at the refund portion of the contract.

“I think it’s completely ambiguous,” says Professor Winn.

As for bankruptcy:

“Bankruptcy is not just that you would get whatever fraction you’re going to get, but after all the costs of the chapter 11 are paid – then you would get what you’re going to get,” says Professor Winn.

This morning, Grad Nights sent this statement, saying:

“The payments our clients have made fund operational costs and services we have already provided…”

“…We are working now with counsel to file Chapter 11 bankruptcy reorganization and enter into a court-approved plan.”

That means there’s little hope of a refund for Kentridge and Steilacoom High School families. And it spells trouble for any Class of 2021 school groups that have already signed up and paid deposits for parties next year.

Even with all those milestones lost, and money gone, 2020 seniors – like Lori’s son, Joey – are still finding a way to mark their achievements with balloons and drive-through graduation celebrations.

For Lori, it’s Joey today, and fighting for refunds tomorrow.

“I’m still working with my parents, and so many of the parents are telling me – we need the money. So we are going to keep trying our best to help all of our Kentridge families.”