The Young Men's Christian Association of Metropolitan Huntsville, Alabama (Heart of the Valley YMCA) has filed an amended disclosure statement with the U.S. Bankruptcy Court for the Northern District of Alabama as part of its ongoing Chapter 11 bankruptcy proceedings. The February 24, 2025 filing outlines the nonprofit's reorganization plan and provides creditors with information to make informed decisions about accepting or rejecting the plan.
The amended disclosure statement, filed in Case No. 24-81638-CRJ11, details how the organization intends to address its approximately $19.4 million in liabilities while continuing operations. A significant factor leading to the bankruptcy was a $15.5 million balloon payment on a mortgage note that came due in August 2024, which would have depleted the organization's cash reserves if paid as demanded by the lender.
According to the filing, the YMCA has also faced challenges from decreased membership, which has declined by nearly 30% since 2019. This reduction has limited capital investments and led to deferred maintenance as operational costs increased.
The plan proposes full payment to all classes of creditors, with secured claims from Redstone Federal Credit Union and the Small Business Administration to be restructured. General unsecured claims will be paid in full from the debtor's future net income in monthly installments over 24 months following the plan's effective date.
The YMCA has already made progress in its restructuring efforts, including the January 2025 sale of its Camp Cha-La-Kee property for $2.35 million to Shannon Provence, though this sale is currently under appeal by an unsuccessful bidder.
The nonprofit, represented by Heard, Ary & Dauro, LLC, operates three membership facilities and three childhood education centers in the Huntsville area, serving approximately 26,846 members and employing 410 people annually. In 2023, the organization provided over $2.6 million in financial assistance and subsidies to community members.
The disclosure statement emphasizes that the reorganization plan is feasible based on the YMCA's five-year budget projections, which anticipate average annual 4% growth in membership and improving net income each year.
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