The start of the new year could see The Pacifica Foundation entering into voluntary bankruptcy. This would occur if Pacifica is unable to secure financing to pay its $1.8 million debt.
That debt is for a judgment related to a missed lease payment for an antenna and transmitter, which is located on the Empire State Building. The outstanding payment is owed to Empire State Realty Trust Inc (NYSE:ESRT), the owner of the space.
There Are More Financial Problems Within Pacifica
Bill Crosier, who is the interim executive director for The Pacifica Foundation, said in an e-mail that the non-profit foundation’s finances have been mismanaged for years. Crosier also stated that Pacifica has not been able to contribute to retirement accounts for its employees. There is presently a shortfall of $750,000 that is owed to the retirement plans.
Will Pacifica File for Bankruptcy?
Whether Pacifica will file for bankruptcy is the million-dollar question; there is a very high probability of this occurring in the coming weeks. Crosier is in favor of filing for bankruptcy in order to protect the assets held by the foundation. Crosier has told the board of directors that entering voluntary bankruptcy would give Pacifica a financial lifeline.
The board members are divided on the issue. One side is in agreement with Crosier in terms of filing for bankruptcy. The opposing side feels that there is no need to file for bankruptcy yet. They feel that Empire State Realty Trust will not go after the assets of Pacifica and that, therefore, there is no need to panic and make a bad decision.
However, there have been many bad decisions already made within the foundation, which has resulted in Pacifica being put in its current situation. If the organization had been managed better, there would be no missed payments toward its employee retirement accounts or its lease obligations.
If Pacifica does not follow through with bankruptcy protection, it will be put in a bad position. Assets may have to be sold off, which is not in the business plans, or Empire State Realty Trust could pick and choose which assets it wants to own. This route would most likely result in seeing the best assets no longer being owned by Pacifica. The assets of the foundation could be seized with no possibility of earning any future revenue or payout from them.
Therefore, not going through the process of filing for bankruptcy could be a more dangerous game to play. Anyone of Pacifica’s five radio stations, located in some of the largest cities in the United States—New York, Berkeley, Los Angeles, Houston, and Washington, DC—could be taken away from the foundation.
There has been no word yet if there will be any job cuts at Pacifica.