With creditors owed more than $750,000, the National Association of People with AIDS filed for Chapter 7 bankruptcy on Thursday and announced it is going out of business 30 years after it was founded in 1983.
“The National Association of People with AIDS (NAPWA) – the largest, oldest, and most trusted voice for the 1.2 million people living with HIV/AIDS in the U.S. – has ceased operations and has filed a petition in United States Bankruptcy Court to discharge its debts in bankruptcy and liquidate,” the chair of the group’s Board of Trustees, Tyler TerMeer, said in a Feb. 14 statement.
The two-page statement highlights NAPWA’s pioneering work on behalf of the rights and wellbeing of people with HIV and AIDS but provides no further information on how NAPWA’s financial health deteriorated to the point where the group was forced into bankruptcy.
One source familiar with NAPWA and some of its board members said the bankruptcy filing follows reports late last year that as much as $700,000 in NAPWA funds was either missing or unaccounted for.
According to the source, the discovery that funds were unaccounted for prompted the board to ask the Montgomery County States Attorney’s office to investigate the matter.
Ramon Korionoff, a spokesperson for the Montgomery County State’s Attorney’s Office, would neither confirm nor deny his office was investigating NAPWA’s finances, saying the office never discloses an ongoing investigation.
Questions about the reported missing funds surfaced at a time when NAPWA was facing a financial crisis that, among other things, prevented it from paying the rent for its Silver Spring, Md., offices for several months and prevented it from meeting its payroll.
The bankruptcy filing shows that many of NAPWA’s former employees are listed as creditors who are owed sums of money ranging from several hundred dollars to more than $4,000.
NAPWA’s landlord, Brookfield Properties, is owed $75,000 in back rent, according to the bankruptcy filing.
Last October, Frank Oldham, who served as NAPWA’s president and CEO since 2006, announced his resignation effective Dec. 31. But Oldham left his post in November, one month earlier than expected, sources familiar with the group said, raising speculation that he was forced out by the board.
In what the group called a restructuring initiative to cut costs, the board dismissed NAPWA’s Executive Vice President Stephen Bailous, in November.
In December, NAPWA Board Chair TerMeer told the Blade the board eliminated the positions of executive vice president, vice president for development, and vice president for communications as a “cost cutting measure” in November. He declined to comment on whether Oldham was forced out a month sooner than his announced resignation date, saying the organization never discusses personnel matters.
Oldham and Bailous couldn’t immediately be reached for comment.
Among the creditors listed in the bankruptcy filing is the District of Columbia HIV/AIDS, Hepatitis, and Sexually Transmitted Disease Administration (HAHSTA), which reportedly is owed $54,000. It couldn’t immediately be determined why NAPWA owes money to the D.C. AIDS administration. However, NAPWA has received grants and contracts from HAHSTA in recent years to provide AIDS-related services.
In a Dec. 5 open letter to the community, TerMeer for the first time mentioned publicly that NAPWA was having financial problems.
“These are difficult times for the nonprofit sector,” he said. “This is no less true for local, state and national AIDS Service Organizations (ASOs), which across the United States are struggling to retain services and keep their doors open. These challenging times present new opportunities to focus on excellence, bring new accountability, promote re-organization for long-term stability and implement strategic vision,” he said.