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Cadets 2020


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3 hours ago, cixelsyd said:

The severance payments you describe were, at the very least, disputed.  However, a news article claims that employer matching contributions to the retirement account were a valid claim.  Per the Morning Call, January 30, 2019:

"According to an order filed in federal court Tuesday, Youth Education in the Arts and Hopkins have reached an agreement on his claim that the nonprofit failed to make a matching contribution to Hopkins’ retirement account, as it was required to do.

An attorney for YEA, Paul G. Lees, said he was not at liberty to discuss the settlement. Anthony Andrisano, who represents Hopkins, did not return a call.

YEA board Chairman Doug Rutherford said YEA has never denied Hopkins was entitled to the organization’s contribution to his retirement account."

(Reading this now, though, I have to wonder how that could happen.  Since Hopkins was CEO/CFO, it must have been his own failure to make those employer matching payments to himself.  So he should sue himself.)

i think he was trying to get more than actually owed

Edited by Jeff Ream
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13 minutes ago, East9900 said:

The good news for The Cadets is that they owe GH absolutely nothing. This is YEA's mess.

 

They (Cadets board) made it clear that The Cadets have zero debt

 

Hope the courts agree with them. Picturing YEA lawyers stoking up that it’s not on them

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2 minutes ago, JimF-LowBari said:

Hope the courts agree with them. Picturing YEA lawyers stoking up that it’s not on them

i don't think that's the case honestly 

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9 minutes ago, JimF-LowBari said:

Hope the courts agree with them. Picturing YEA lawyers stoking up that it’s not on them

I’m envisioning YEA saying that they have no money and his lawyers saying that you spun off YEA assets to shield them from YEA’s debt. The Cadets and all the assets were listed as YEA property in their 990s, so hopefully they did some legal tactics to eliminate that scenario. 

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58 minutes ago, cybersnyder said:

I’m envisioning YEA saying that they have no money and his lawyers saying that you spun off YEA assets to shield them from YEA’s debt. The Cadets and all the assets were listed as YEA property in their 990s, so hopefully they did some legal tactics to eliminate that scenario. 

IANAL but in terms of program costs/revenues it makes financial sense for YEA to drop The Cadets since they have historically cost more than they bring in. I think there is a hope that detaching from YEA brings in more money for The Cadets because it will be clearer where your money is going, the impression I got from the livestream the other night is that some people weren't willing to donate to YEA because they didn't know where there money was going, was it going to The Cadets or was it going to some other YEA program?

It legitimately seems like the intention is for this to be in the best interests of both organizations and not just a way to drop a bunch of debt on YEA who then goes bankrupt. The unknowns are how much more The Cadets can bring in as a stand alone entity and how much the rest of YEA suffers from losing the connection to The Cadets.

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6 hours ago, dbc03 said:

IANAL but in terms of program costs/revenues it makes financial sense for YEA to drop The Cadets since they have historically cost more than they bring in. I think there is a hope that detaching from YEA brings in more money for The Cadets because it will be clearer where your money is going, the impression I got from the livestream the other night is that some people weren't willing to donate to YEA because they didn't know where there money was going, was it going to The Cadets or was it going to some other YEA program?

It legitimately seems like the intention is for this to be in the best interests of both organizations and not just a way to drop a bunch of debt on YEA who then goes bankrupt. The unknowns are how much more The Cadets can bring in as a stand alone entity and how much the rest of YEA suffers from losing the connection to The Cadets.

I guess I'm just looking at worst case scenario of them being on tour and the equipment truck or food truck being repossessed. I believe that the instruments were on loan due to a generous benefactor, so they should be safe. Hopefully the equipment was sold to the Cadets when they spun off. The lawyers would know how to shield things like that.

Edited by cybersnyder
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I’m not a lawyer, but in Pennsylvania Bankruptcy Court there is a “look back” period of 4 years. In other words, assets transferred during that period are still eligible to be attached and liquidated.

Yes, I did stay at a Holiday Inn Express many times !

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1 hour ago, Fred Windish said:

I’m not a lawyer, but in Pennsylvania Bankruptcy Court there is a “look back” period of 4 years. In other words, assets transferred during that period are still eligible to be attached and liquidated.

Yes, I did stay at a Holiday Inn Express many times !

There's no such thing as state bankruptcy court. It's 100% federal. There is certainly a bankruptcy court within the state of Pennsylvania, but it's a United States court.

Voidable transfers (transfers made for the purpose of avoiding being included in the bankruptcy estate) are a very real fear in a transaction like this. The bankruptcy trustee has broad power to claw back transfers that demonstrate "badges of fraud". I hope that YEA has competent legal counsel. Last time I heard, they had no counsel, so that could be an issue.

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17 minutes ago, exitmusic said:

There's no such thing as state bankruptcy court. It's 100% federal. There is certainly a bankruptcy court within the state of Pennsylvania, but it's a United States court.

Voidable transfers (transfers made for the purpose of avoiding being included in the bankruptcy estate) are a very real fear in a transaction like this. The bankruptcy trustee has broad power to claw back transfers that demonstrate "badges of fraud". I hope that YEA has competent legal counsel. Last time I heard, they had no counsel, so that could be an issue.

Not to mention that there's Chapters 11, 13, 7...

Not all of those treat creditors in the same way.

A presumption being made here is that Cadets made deals by themselves out from under the YEA! umbrella.  Not even GH would be so stupid.  And, frankly, because Cadets was not a  separate entity with their own Fed Tax ID, I'd bet almost all, if not all, debt was incurred under the YEA! banner.  In fact, a case can be made that YEA! was prudent in shedding Cadets as their biggest expense.  If their biggest revenue source, USBands, can't make it anymore, well, then bank-o it is.

 

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