Endowments and Bankruptcy

Charities, private foundations, and arts organizations are often supported by endowments. Endowments are typically made up of large donations made to the organizations. Instead of using endowment money as spending cash, it is typically invested, allowing organizations to use the interest of this investment as part of their cash-flow.

In today's tough economy, thousands of businesses supported by endowments are struggling to make ends meet. Many of these organizations are restricted from using money from an endowment to help with their financial problems. If your organization is struggling to pay debts, bankruptcy may be the key to a more secure financial future. Contact the Arizona bankruptcy attorneys at the Harmon Law Office, LLC, today at 480-829-0494 to learn more about filing for bankruptcy.

How Endowments are Treated in Bankruptcy

Each endowment will be guarded by specific rules in regards to the withdrawal and spending of money in the endowment. Many people that make donations to institution do so because they want the organization to be protected in the future. Unfortunately, not all these organizations are able to thrive merely on the interest of an endowment.

Chapter 11 bankruptcy is typically used by organizations with unmanageable deficits. Chapter 11, as opposed to other types of bankruptcy, is based on reorganization and some relief of debt. It allows an organization to continue to operate without dipping into a large endowment.

Contact Us

Too many people believe that financial struggles are the beginning of the end for an organization. Before you fear the worst, speak with an Arizona bankruptcy attorney at the Harmon Law Office, LLC. You may be surprised by all the options you have in moving forward. Contact us today by calling 480-829-0494.