Counseling the Nonprofit Debtor in Financial Distress
An article published in Business Law Today addressed some issues that might arise when commencing a relationship with a small nonprofit facing insolvency. At CLG, we often assist small nonprofits, on a pro bono or paying basis. Larger nonprofit institutions such as universities or hospitals will generally have sophisticated boards and access to appropriate legal services, but smaller nonprofits often exist at the margins and may not have regular contact with a lawyer. They might find themselves in financial trouble with little information about their legal rights and responsibilities. At this juncture, a nonprofit may reach out for pro bono legal assistance, or use its board’s network of contacts to find a business lawyer. Similarly, a general business lawyer who serves on a nonprofit board might encounter requests for advice about how to deal with an organization’s financial distress. The article explored how an attorney responding to such a request might proceed, and gave some general guidelines about how to help in this situation.