I still don't get it why, despite all the advice you have been given, you do not see that you are now the problem. Here you are restructuring your entire class just to accomodate someone who shows with consistent behavior that he will not comply. When I used to be a counselor, I would describe this guy as someone with a Narcissistic Personality Disorder. Such people cannot be argued with, they do not/cannot listen. Narcissistic personality disorder (NPD) is a personality disorder in which the individual is described as being excessively preoccupied with issues of personal adequacy, power, prestige and vanity - sound like someone you know??
In the end this is not my school. I can only control the experience the other students in my class have by limiting their contact with him. It is the head instructor's call in the end whether or not they want to continue admitting this person to the school. I however do not have to admit him to my class.