ACORN files for bankruptcy; if FCR doesn't get its $1 million loan repaid, it still will have reaped far more in value from ACORN's support
It looks like Forest City Ratner may not get its money back.
According to a post yesterday by CEO Bertha Lewis on ACORN's web site, the national organization, which earlier this year relaunched as separate state organizations (such as New York Communities for Change), has declared Chapter 7 bankruptcy as funding dried up in the wake of (mostly trumped-up) scandal.
Still, as I've written, it's notable that ACORN has gotten very little bad press concerning two far more legitimate issues: the cover-up of an embezzlement by its founder's brother and the $1.5 million loan/gift bailout of the national organization by developer Forest City Ratner.
Chapter 7 bankruptcy, also known as "liquidation," allows the organization or individual to keep exempt property and have the rest of the property sold by a court-appointed trustee.
According to ACORN whistleblower Anita MonCrief, the $1 million loan, half delivered 8/1/08 and the other half on 10/1/08, was granted at an annual interest rate of 4.58%, with 36 monthly payments from 6/1/09 through 5/31/11. If ACORN missed payments, after 30 days the interest rate would rise to an annual rate of 18%--an interest rate that alarmed some ACORN board members.
How much of this has been paid back? We don't know, but the bankruptcy filing hints that FCR didn't get repaid.
Then again, the developer has gotten well more than $1.5 million value out of ACORN's and Lewis's support for Atlantic Yards, given the importance of ACORN in getting official approval of the project at the size requested.
Beyond the $1 million loan, the rest of the money was a grant: $300,000 in August 2008, then $100,000 in August 2009 and again in August 2010, to the ACORN Institute.
Excerpts from the ACORN post
The end of an era: ACORN files Chapter 7 bankruptcy
Bertha Lewis, CEO
2 November 2010
For over 40 years ACORN has fought the good fight. From a few initial neighborhoods in Little Rock, Arkansas, we grew to become a large, active, national organization of low- and moderate-income families, mostly people of color, working together to make their communities a better place. In working together, we helped families see that they can make a difference.
....The ongoing political onslaught caused irreparable harm. This effort was a clear attempt to cast a shadow over the historic 2008 Presidential election, and set up a far right counter offense. Through those attacks we re-tooled and re-organized. Then again came the right-wing media blitz. This time of edited videos that misrepresented our mission, and consequently misled the public. The pressure and cost of defending ourselves in multiple investigations as a result of the falsified videos has eroded our organization. As a result we will be filing Chapter 7 bankruptcy by close of business today.
We have seen this coming for some time. Our chapters closed in the first quarter of the year. We have spent our remaining resources trying to dissolve the organization with integrity, while continuing to respond to the extremist attacks. Allegations and reports will continue to try to undermine all that ACORN has done, often searching for evidence from long before I became CEO.
Thank you to all our members, supporters, funders, friends and allies who helped ACORN carve out a deep and lasting place in history. Let us all learn from the past, and march boldly into the future. ACORN will live on in the hearts of the people it served, and as those of us who fight for justice know, "THE PEOPLE UNITED WILL NEVER BE DEFEATED".