Mission Solano, a California homeless shelter announced this week that its board of directors is pursuing Chapter 7 bankruptcy this week and will eliminate its nonprofit status. Business bankruptcy in Fairfield, CA offers the benefit of reducing debt for a struggling company. The shelter has struggled to obtain additional bridge funding over the past several months that the organization said it needed in order to keeps its doors open. The CEO of Mission Solano cited that previous leadership was responsible for the dire financial situation, claiming the majority of the $3.1 million in liabilities was inherited from prior directors of the program.
Fairfield Bankruptcy Filing
Mission Solano filed for bankruptcy in the US Bankruptcy Court for the Eastern District of California in Sacramento, CA. Mission Solano's, according to tax filings, has an annual revenue of $3 million, but must pay $2.7 million in secured mortgage payments for its property and another $1.2 million in payroll, creating a financial shortfall that has been exacerbated by a lack of private funding. After much debate, the Mission Solano determined that the best way to ensure continued services to residents was to file for bankruptcy in Fairfield, CA and dissolve as an organization.
Shelter Remains Open
The executive director of the Coalition that runs Mission Solano in Fairfield made an announcement that they have "made significant progress in ensuring that shelter services remain open", while the organization sorts out its debt issues.
Fairfield Bankruptcy Attorney
Chapter 7 bankruptcy could be considered the very last option for a debt-stricken organization or business, and other options exist. If your company is having debt issues or trouble making payments to employees or vendors, it's time to consult a Fairfield bankruptcy attorney. If you wish to stay in business, your bankruptcy attorney may advise you to file for Chapter 11 in order to reorganize your company debt to allow you to continue business as usual, while renegotiating debt with your creditors.