May 25, 2010; Source: Tampa Bay Online | Usually in bankruptcy creditors come first, not the organization going down the tubes. From Florida comes word that SeedAmerica Foundation—a nonprofit featured previously in NPQ that is facing bankruptcy because of its failure to turn abandoned properties into profitable office space—demolished a building and then pocketed the proceeds.
SeedAmerica’s original plan was to take over industrial buildings donated to it (in return for a tax write off) and then renovate the space and rent out offices. To underwrite the work, SeedAmerica took out loans, and used the buildings as collateral. When that plan didn’t work, SeedAmerica filed for Chapter 11 protection last March. Now, according to the Tampa Tribune, Pinecrest National Funding of New York, the foundation’s largest creditor, alleges that SeedAmerica CEO Joseph Johnson ordered that an abandoned 700,000-square-foot printing plant in Salem, Ill., be demolished. And, says the funder, the demolition occured without its consent.
More so, Pinecrest claims in court papers that Joseph sold scrap metal from the factories and he and his wife kept the money for themselves instead of making it part of a future bankruptcy settlement. The way things are going for SeedAmerica, it looks like more than buildings are collapsing around it.—Bruce Trachtenberg