The South Brunswick YMCA announced on Feb. 15 that it has filed for Chapter 11 bankruptcy.
According to YMCA Executive Director Tom Libassi, this chapter of the U.S. bankruptcy code will provide protection for the YMCA while it reorganizes in order to create a more financially sound organization.
“Chapter 11 provides us protection from creditors while we formulate our reorganization plan,” Libassi told the Sentinel.
In a note sent to email subscribers, the YMCA cited the economy as a factor in its bankruptcy filing.
“Like so many businesses and organizations in our area, the South Brunswick YMCA has been adversely affected by the economic recession,” the email read. “We believe the action our board has taken is the first step toward restoring our YMCA’s operational and fiscal health.”
Libassi said that both membership and donations have been down over the past few years, resulting in less revenue for the YMCA.
He explained that Chapter 11 bankruptcy ensures that creditors cannot go after the YMCA for debts while it reorganizes. “The reorganization will allow us to work with our major creditors to develop a plan to come out of bankruptcy in a stronger position and operate as normal,” Libassi said.
The bankruptcy filing will not have an effect on the YMCA’s programming or services during the reorganization process, which will take at least six months, YMCA officials said.