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BEHIV files for bankruptcy, clears air
by Joseph Erbentraut, Windy City Times
2011-03-09

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Having announced it would be closing its doors and transferring its housing and case-management clients to other agencies earlier this year, Chicago HIV/AIDS service organization Better Existence With HIV (BEHIV) has now filed for bankruptcy and taken down its website.

BEHIV filed for Chapter 7 bankruptcy on Feb. 11, with a meeting of creditors currently scheduled for March 21. BEHIV will be represented by David P. Leibowitz of the Lakelaw firm in the forthcoming proceedings.

Leibowitz, who is providing his legal services to BEHIV on a pro bono basis, said the agency is now focusing on wrapping up its affairs in an orderly fashion while continuing to support the efforts of the other agencies who have taken over the services provided to its former clients.

"BEHIV and their officers and directors are very proud of the service that BEHIV has provided to the community it has served over many years and regrets they did not have the funding to continue doing what it does," Leibowitz said. "But the people who have been served will continue to be served and served well."

The closing of BEHIV came less than a month after the abrupt announcement that its executive director, Eric Nelson, had resigned. At that time, the leadership cited reduced individual giving during the previous two years and a changing funding relationship with the AIDS Foundation of Chicago (AFC)—namely, a "pending decision" on the part of AFC to suspend its funding of agencies, like BEHIV, who lack an on-site medical clinic.

AFC subsequently denied that such a decision was pending. AFC's claim is in line with the fact that Chicago House, itself without an on-site medical clinic, has taken in many of BEHIV's former clients and, reportedly, much of the funding AFC had previously provided to support such services.

BEHIV Board President Matthew Gibbs reiterated in a phone conversation March 6 that the agency's efforts in recent months were concentrated on transitioning its client load to other agencies without interruption—a difficult feat Gibbs said it successfully accomplished and had not been given enough credit for—rather than responding to interview requests from media, including the Windy City Times.

"A lot of work went into the 20 years of records that had to be taken care of properly and that's what we put our energy into. I'm never going to apologize for making that a priority because that is our priority. The clients are who we're here for," Gibbs said.

Although Gibbs had indicated that there was "no fire to put out at this time" shortly after Nelson's resignation, he said a matter of days later, the agency discovered that was not entirely the case. The agency's outstanding, five-year $133,615 line of credit was set to come to term March 1, a deadline he said BEHIV had overlooked. With shrunken assets, the agency was unable to refinance its debt.

Accompanied with BEHIV leadership's claim of a changing financial relationship with AFC, plus the loss of funding from two major grantors—the M.A.C. AIDS Fund and the Centers for Disease Control and Prevention—in the last year, a "perfect storm" had formed.

"We didn't anticipate that all this would be coming at once, so we had to make the hard decision to close," Gibbs said.

While the agency's website, www.behiv.org, was taken down March 4—nearly two months after their closing announcement—Gibbs said that delay was caused due to a "disgruntled former employee" who retained control over the web domain. BEHIV submitted a claim to the National Arbitration Forum in December to regain control.

As of Jan. 25, the claim was successful. Gibbs suspects that same former employee may be behind anonymous e-mails being circulated between local LGBT media and his employer—MedCo Health—accusing him of mismanaging agency funds. He plans to hire a private investigator to look into the matter.

Gibbs also added that, to his knowledge, all former BEHIV employees had been paid in full up to the date of the agency's closing, although he said Nelson had, at one point, made a personal loan to the organization that remained outstanding. It is unclear, at this time, whether this is a separate loan from one Nelson made—to the sum of $22,500—that the agency reported it already paid back in September 2009.

Commenting on the broader HIV/AIDS community in Chicago going forward, Gibbs said he hoped other agencies would take a closer look at their financial health in order to avoid finding themselves "in the same position we did," mirroring comments made by Vital Bridges co-founder Lori Cannon and other leading HIV/AIDS service providers recently. He still denied AFC's claim that it had not told BEHIV of any pending defunding.

"I've seen them say that's not what's going to necessarily happen, but I think the community knows what's going to happen," Gibbs said. "I hope [other agencies] start talking with one another and working together and hopefully they'll have the benefit of consolidating or merging."


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