This week on I 501(c) You, we are hearing from Steven Solomon, Managing Shareholder of GrayRobinson’s Miami office and Chair of the firm’s Bankruptcy Section. This is a unique episode because we get to learn all about nonprofit bankruptcy and how it can be used as a strategic vehicle. We hope this can provide your organization with a little information about another resource to potentially think about if your organization runs into some trouble. Bankruptcy is not for every organization, but as a board member, you have a fiduciary responsibility to explore all options if things are going awry.
Steven walks us through some of the reasons a nonprofit would file for bankruptcy, some of the factors they should consider when thinking about bankruptcy, and how a nonprofit organization can use bankruptcy as a strategic vehicle.
Some of the major takeaways from this episode are:
Bankruptcy is not a destination, it is a means to an end.
When going through bankruptcy as a nonprofit, communication to the public and your largest stakeholders is EXTREMELY important.
This is another great reason to have a diverse range of expertise on your board.
We hope this episode is as informative to you as it was to us. We learned so much about bankruptcy and how it can help or hurt a nonprofit organization.
Timestamps:
00:43 - Interview starts
01:38 - Reasons why a nonprofit would think about bankruptcy
03:55 - Does the size of the organization matter?
04:20 - Bankruptcy is not a destination, it is a means to an end
07:30 - Examples of strategic bankruptcies
12:40 - When would a nonprofit organization consult with a bankruptcy lawyer
16:30 - Types of bankruptcy
18:00 - Bankruptcy code of assets for nonprofit organization
19:50 - Chapter 11 bankruptcy for a nonprofit organization
21:45 - Who calls you, board chair/executive director?
23:20 - Bankruptcy as a strategic vehicle
27:00 - One of the first questions Steven asks nonprofit organizations considering bankruptcy
34:20 - Final thoughts
37:49 - Recapping with Read
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