NOBODY LIKES THE dreaded “b” word. It sounds so much better when you call it “reorganization.”
Call it what you want, but today after a long, difficult year, the Marquette County YMCA filed for Chapter 11 bankruptcy.
That means it’s asking the court to “reorganize” its debts that still total nearly $5 million.
What it also means–and this is the good news–is that it will continue operating for its 5000 members in Marquette County. No changes for them, the doors are still open.
The bankruptcy filing was a tough decision for the Y’s new Board of Volunteers, but ultimately they found no viable alternative.
Selling off assets, cutting staff and programs, and holding fundraisers could do only so much. Five million dollars is an impossibly steep mountain to climb for a small town YMCA.
Not that they didn’t try. They sold off their facility on Wright Street, and they paid back almost $500,000 in bills–most of it to local businesses.
But what they couldn’t get around were these bills:
1…$2.9 million owed to the Department of Agriculture.
2…$750,000 owed to Range Bank.
3…More than $1 million owed to two other creditors. Those two cases are now in litigation.
The USDA and Range have been remarkably understanding, the Y’s Board says, but few institutions, for-profit or non-profit, are going to say, “Never mind. Don’t worry about all those hundreds of thousands of dollars you owe us.”
How’d it get to this point? Pretty simple. The YMCA, under its previous CEO who resigned under fire last March, got overly ambitious. New construction, a new acquisition, new programs, new hiring.
Everything looked wonderful…until the bill collector came around.
Now a year later, a new and chastened YMCA will be reborn under the guidance of a bankruptcy court. Not an ideal situation, but it is what it is.
Some of the creditors will get screwed, but Marquette County will keep its YMCA.
Further good news: the new Board of Volunteers who will oversee the rebirth are all plugged-in, responsible, and committed individuals. The Board Chairwoman, Michele Butler, is one of the original founders of the YMCA. She is as devoted to the institution as they come. She is as astute as they come.
The current CEO, Jenna Zdunek, who had nothing to do with the Y’s spending frenzy in the last couple of years and is highly regarded, has gotten a Master’s course on financial responsibility over the last several months.
What she and everybody else associated with the YMCA has learned is this: Don’t buy things if you can’t afford them.
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