ACORN Goes For Broke
November 16, 2009
As its financial resources dwindle, radical advocacy group and organized crime syndicate ACORN may have to file for bankruptcy protection before Christmas, ACORN insiders say.
“They may have to file for bankruptcy if they don’t have several big pending grants approved or get emergency loans,” a highly placed ACORN source told me over the weekend. This information bolsters Rep. Darrell Issa’s (R-Calif.) claim last week that ACORN is in turmoil amidst internal power struggles and on the verge of bankruptcy.
Given that ACORN is a network of hundreds of affiliated nonprofits, it’s not exactly clear how a bankruptcy filing would work, but the idea is under serious consideration by ACORN’s leadership. It was discussed at length at the group’s most recent national board meeting, which took place in the suburbs of Washington, D.C., during the Oct. 14-15 weekend, ACORN sources told me.
But even if ACORN were to go bankrupt, that doesn’t mean it would disappear.
ACORN may dissolve and then re-emerge as a new organization, the group’s lawyer Arthur Z. Schwartz says. Such a re-organization may involve “the creation of new nonprofit entities in each state where ACORN functions, as ACORN considers moving from a centralized corporate structure, to a decentralized federated structure,” Schwartz said. “ACORN will need help from people who have handled rebranding.”
As of Nov. 11, ACORN and its affiliates owed at least $2,328,596 in long overdue back taxes to all levels of government. Many of the tax liens, which are only issued by creditor tax agencies after a tax debt has become seriously delinquent, do not appear in the Nexis database, so the actual total may be much higher. ACORN has been negotiating with tax collectors to have interest on its tax debts waived and to have some of the debts partially forgiven.
The new tax lien data throw new light on why ACORN can’t sell its former headquarters at 1024 Elysian Fields Ave. in New Orleans. French Quarter Realty is asking $835,000 for the property, which is now weighed down by a whopping $1,278,862 in tax liens.
Of that nearly $1.3 million, $619,271 is owed to the IRS. It’s unclear why the Obama administration’s tax enforcers haven’t seized the property yet. Perhaps the president is extending a courtesy to his former employer.
Most of the taxes ACORN and its affiliates failed to pay may be payroll taxes. Directors of ACORN and its affiliates may find themselves in for a rude shock because even in bankruptcy directors can find themselves personally liable for payroll deductions for taxes that were not remitted to the government…