The Hispanic Chamber of Commerce in Yakima County, Washington, is filing for bankruptcy and is almost certainly headed for dissolution. The organization is seeking protection under Chapter 7 bankruptcy protections after it lost a major lawsuit. News reports show that the man received nearly $15,000 from the chamber. The chamber was sent into bankruptcy because it had only about $500 in listed assets, with the lawsuit award as an outstanding liability.
Official reports show that the chamber was contracted with that man to pay for his services at a Cinco de Mayo event. The chamber was slated to pay the man several thousand dollars each year to provide a high-quality sound system and covered stage for the celebration. However, the chamber broke its contract just days before the festivities in 2013. Chamber members say they decided to go with another contractor because the first man did not have a business license.
Instead of paying the man the $3,500 he demanded because of the contract, the chamber chose to fight the amount of the contract. As a result, they ended up paying about four times that amount, which ostensibly sent them into bankruptcy. A legal ruling showed that the chamber did not have a legitimate reason for terminating the man’s contract.
Legal rulings are common factors that lead businesses to declare Chapter 7 bankruptcy. Filing for Chapter 7 is available to both individual residents and businesses under Washington law. This liquidation bankruptcy allows the filer to expunge most debts while liquidating assets to satisfy creditors. Those who are struggling with debt may be eligible for this method of achieving debt relief.
Source: Yakima Herald-Republic, “Hispanic Chamber of Commerce filed for bankruptcy, disbanding” Phil Ferolito, May. 15, 2014