Simon Heaton said he expected to get a prestigious credential from the University of Pennsylvania’s Wharton School last year, after his company paid about $23,000 for him to take a two-week leadership course for human-resources executives.
Instead, the chief talent officer at global advisory firm Stout Risius Ross, LLC, had to tell his CEO that the on-campus master class had been canceled and a refund was unlikely. “It was embarrassing,” the 47-year-old Mr. Heaton said. “It feels like we were duped.”
Mr. Heaton is one of about 40 HR executives who had signed up to participate in the business school’s TMI-Wharton Fellow Program in Talent Management scheduled for August 2020. Why the course never came to be is at the center of two lawsuits Wharton filed against the education company it tapped as a partner to administer the course.
The executive-education course had been taught in previous years by some of Wharton’s top management professors, and a third party called CredForce America Inc. marketed and managed it, signing up executive students and collecting tuition payments under the TMI-Wharton brand. Such arrangements are increasingly common as business schools expand lucrative executive-education offerings.
Executive-education courses, often provided by outside entities, are increasingly common and seen as moneymakers at business schools; Wharton School students at work in 2019.
Photo: Mark Makela/Getty Images
TMI-Wharton emailed enrollees last spring to say the August program would be delayed due to the coronavirus pandemic. Enrollees got another email this past February, this time from the business school, saying Wharton had severed business ties with CredForce and the TMI-Wharton brand, and hadn’t received the executives’ tuition payments from CredForce.
Wharton also told the HR professionals that it had sued CredForce, the U.S. affiliate of Indian company CredForce Asia Ltd. In lawsuits filed in October and March in federal court in Philadelphia, Wharton alleges CredForce failed to pay the school more than $1.2 million in fees and interest accrued since 2018 and fraudulently used its intellectual property and logos in continuing to market the course, though Wharton hadn’t signed an agreement for one in the 2020 academic year. It also alleges that CredForce used a forged signature of a school employee to make promises to prospective students of future on-campus classes at Wharton.
According to the suits, the business school partnered with CredForce in 2017 and taught the two-week, on-campus program to executive classes in 2018 and 2019, awarding participants a Wharton fellow of talent management credential. But in December 2019, Wharton told CredForce it couldn’t agree to another year until CredForce had paid its outstanding invoices, the suits say.
The suits allege that CredForce kept marketing the program for 2020 and accepting new students. In its second suit, Wharton alleges that CredForce executives later transferred all materials related to Wharton’s programs to Edvantic Inc.—which is also run by CredForce CEO Rajiv Gupta —in an effort to siphon funds from the companies and avoid obligations to students and other creditors.
Wharton’s second suit names CredForce, TMI-Wharton Programs and Edvantic as defendants, as well as Mr. Gupta and two other CredForce executives, Sanjeeva Shukla and Lawrence Ingerly.
Speaking on behalf of the company and the executives, Mr. Shukla, the company’s chief product officer, denied the forged-signature accusation or any improper use of Wharton’s name and logos. He also said Wharton and CredForce had recruited the 2020 enrollees together. The company planned to pay Wharton what it owed, he added, but revenue and cash-flow declines had kept it from doing so.
“Wharton is lying through its cheeks,” Mr. Shukla wrote in an email to The Wall Street Journal, saying he hoped the two sides could resolve the dispute and still provide the program for the 2020 class. “We regret and feel utterly distraught that a very understandable delay in payment of dues under a million dollars can make a century-old brand like Wharton so desperate that it starts a campaign of lies and falsehoods against a dynamic, growing company.”
On Friday, U.S. District Judge Petrese B. Tucker granted Wharton’s motion for a default judgment, ordering CredForce to pay the $1.2 million and restricting the company and its affiliates from using any logos or images related to Wharton for sales purposes. Mr. Shukla couldn’t be reached for comment on the order.
A spokesman for the University of Pennsylvania declined to comment on the litigation, its communications with enrollees in the executive-education course or CredForce’s response to its legal action. Last month, Wharton emailed the HR executives enrolled in the 2020 class again to say it couldn’t refund their tuition, but would offer a makeup program at no charge after Covid-19 restrictions at the university were lifted.
“We recognize that you had no reason to know that information you have received about the program could have been misleading or false,” the school wrote.
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Executive education and other credentialing programs with third-party providers have grown increasingly popular at business schools. Executive-education courses, which are geared at up-and-coming managers and often paid for by businesses, are seen as moneymakers for many business schools and are comparatively cheap to operate compared with other graduate degrees.
Suspension of in-person executive-education programs because of the pandemic was cited as one of the top reasons for revenue declines at 43% of business schools world-wide this past year, according to a January survey by the European Foundation for Management Development, an international nonprofit industry group.
Administrators at the University of Illinois’s Gies College of Business briefly looked into partnering with Edvantic on an executive-education program but decided against it, because they worried about relinquishing too much control, said Brooke Elliott, an associate dean at Gies.
“You’re just licensing your name, some faculty time, and some content but it’s a much lower lift and can generate significant returns,” she said. “I just couldn’t get comfortable with it.”
On its website, CredForce said it operates in more than 180 countries and administers more than 50 different skills-certification products.
CredForce’s Mr. Shukla said the company—which he said had been renamed Edvantic because its focus was shifting from skills-credentialing to education management—had similar partnerships with other business schools in the pipeline but couldn’t name them because the pandemic had put them on hold.
Mr. Heaton, the chief talent officer, said he and many of the other executives have attempted to reach CredForce to recoup their tuition payments, with little luck. Some of the executives have considered legal action against the company, he said. He doesn’t blame Wharton, he said, and plans to take the makeup course.
“We didn’t pick another university, we picked Wharton,” he said. “You pay a premium for that brand. Wharton’s made good on a difficult situation.”
Write to Patrick Thomas at [email protected]
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