Reference no: EM132961837

You are the management team of a regional food bank in Spokane, Washington. The need for the food bank's services continues to grow, but the food bank had a very ambitious board that expanded too quickly. A year ago, the Spokane Area Food Bank built a new warehouse on the east side of Spokane to serve that population, and it built a new headquarters building near the Spokane Airport. In an entrepreneurial moment, it felt it could serve other nonprofits by leasing office space in its new building to other groups. However, 6 months ago, the largest locally owned food retailer in the Spokane area sold its business to an outside company that is no longer donating significant sums to the Spokane Area Food Bank. Without this corporate support, the debt service expense on the two new buildings (the warehouse and the office building) is causing a serious cash flow crisis for the food bank.

Problem 1: Should the management team recommend simply closing the food bank, or should it declare bankruptcy and begin the reorganization process?