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The United Neighborhood Organization is Potentially Facing Bankruptcy

Posted on in Bankruptcy
The United Neighborhood Organization is Potentially Facing Bankruptcy

The United Neighborhood Organization (UNO), the company behind the UNO Charter School Network, is potentially facing bankruptcy. UNO Charter School Network, once the most powerful Hispanic community group in Chicago, will potentially have to close six of its schools to remain financially solvent. These schools serve approximately 4,000 students from elementary through high school.

“We may have no option left than to file for bankruptcy,” CEO Rick Cerda wrote to the Chicago Sun-Times. When a large non-profit company like UNO files for bankruptcy, it is often the people who benefit from that organization's charity who suffer. In this case, this means the students and their parents who used UNO's schools. For a company like this, bankruptcy is a much different process than it is for an individual facing personal debt or a small business owner who is not making a profit. However, there are some similarities between them, mainly concerning the court's involvement to ensure that the bankrupt party's creditors are paid. To learn more about the different types of bankruptcy, contact an experienced bankruptcy attorney.

Selling Schools

UNO Charter School Network formed in 1998. It managed 16 schools in buildings owned by the United Neighborhood Organization until mid-2015, when it did not pay all of its management fees to UNO for the year. Every year, the charter school network is required to pay UNO $8 million in rental and management fees to operate. This money comes from the network's $80 million yearly endowment from the Chicago Board of Education.

If UNO files for bankruptcy, the buildings will belong to its creditors. Because its creditors are not likely to be in the business of operating charter schools, the buildings will likely be sold. But this is not a simple task – the UNO Charter School Network has 30-year leases on its school buildings, which it says will remain open regardless of how UNO's bankruptcy procedure goes.

In most cases where a private company files for bankruptcy, its operations are taken over by the court and its creditors, who work together to find a way to repay the company's debts. This can mean restructuring its business model or management team, cutting jobs, or exploring new profit streams. In many cases, the repayment process can take years to complete.

Illinois Bankruptcy Attorneys

Bankruptcy can be a very complicated subject. If you are facing a significant amount of debt and beginning to feel like you have run out of options, contact an experienced bankruptcy attorney to discuss the possibility of alleviating your debt through this process. Our team of compassionate attorneys at Newland & Newland, LLP, can examine all the details present in your case to help you make the right decision about your debt. Then, if you decide to file for bankruptcy, we are here to protect your interests and your rights as you work with the court to fulfill your legal obligations. Do not wait to get started with our firm.

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