A long-standing tradition in American communities, the YMCA organization provides community centers and recreational opportunities across the country. South Carolina residents may be disappointed to hear that one such community in another southern state will be losing its local Y. The branch is closing its doors after a local bank renewed its push for the company to pay back an outstanding loan, prompting ownership to file for Chapter 7 bankruptcy.
As many South Carolina business owners are already aware, a Chapter 7 filing relies on asset liquidation to pay down existing debts. In the case of this particular YMCA, those assets will go predominantly to an outstanding debt dating back to 2007, taken from a local bank to pay for upgrades to the grounds. The debt was not given an exact value, but it is thought to be valued in the millions of dollars.
The bank renewed its demand for payment of the loan on Oct. 15 of this year, prompting an Oct. 18 bankruptcy filing. The company has expressed regret to be leaving the community but has promised to try and refund payments to any private citizens who have paid in advance for services like childrens' programming. The buildings housing the Y will revert to the landlords.
Organizations like the YMCA rely heavily on charitable funding to keep their doors open. As South Carolina business owners are aware, if the funding dries up, it becomes more difficult to pay back loans. Thankfully, Chapter 7 bankruptcy allows physical assets to be liquidated to help pay down creditors, which in this case will hopefully allow ownership to move forward and continue helping the community in other ways.
Source: nwfdailynews.com, "YMCA files for bankruptcy; list of creditors more than 20 pages long", Tom McLaughlin, Oct. 20, 2014