Tuesday, March 11, 2014

Rainbows United restructuring after bankruptcy is paying off

A story about a bankruptcy with a happy ending.  Per

  • The Wichita Eagle

  • Published Monday, March 10, 2014, at 12 p.m.
  • Updated Tuesday, March 11, 2014, at 5:29 a.m.

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It was Pajama Day at Rainbows United.
Some of the kids were having a Dr. Seuss story read to them. Groups of toddlers were taking rides in a wagon. Other toddlers were making shapes out of Play-Doh.
All of this was happening at a Rainbows United facility near K-96 and Oliver one afternoon last week, four and a half years after it appeared unlikely that kids would be doing anything at Rainbows United ever again.
The 41-year old organization had been forced to declare Chapter 11 bankruptcy in July 2009 and nearly shut its doors for good.
But recently, Rainbows was able to pay off its remaining debt to the Internal Revenue Service 16 months ahead of schedule, offer creditors early payout of an eight-year plan, consolidate its remaining debt and a building loan into a 15-year mortgage, and reduce its monthly debt payments from $57,500 to $22,000.
It also has been operating with an efficiency and transparency it didn’t have before the bankruptcy, according to its president and board members.
“Four and a half years ago, we were the poster child for what can go wrong in a nonprofit,” said Steve Cox, a Rainbows board member who helped lead the drive to pull the organization out of bankruptcy. “Quite honestly, now we are an example of how a nonprofit can function when things are going well.”
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