FEGS Files For Bankruptcy, Gets Debt Financing From N.Y. Federation
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FEGS Files For Bankruptcy, Gets Debt Financing From N.Y. Federation

FEGS, one of the country’s largest Jewish social services agencies, has filed for bankruptcy.
A month after announcing that financial problems were forcing its shutdown, FEGS Health & Human Services made the bankruptcy announcement in a news release on Wednesday.

The release said FEGS was in the “final stage” of transferring its programs and contracts to other agencies and “winding down” its operations. It described the bankruptcy filing as a way of ensuring “the uninterrupted continuation of FEGS programs and services to clients under different agencies.”

UJA-Federation of New York said it would offer FEGS, which is a federation beneficiary agency, “debtor-in-possession financing” of up to $10 million to help ensure the smooth transfer of its programs. While FEGS is primarily funded through government contracts, it also provides several Jewish-specific services that are funded by the federation.

In an email to donors, UJA-Federation CEO Eric Goldstein said his group was “actively working to find appropriate homes within our network for FEGS’s programs that are funded by UJA-Federation targeted grants” and will announce a “complete transition plan” by the end of this month.

The federation also is “carefully examining” accountability guidelines, other audit and governance requirements, and training for its network agencies.

At the time it announced its closing, FEGS (an acronym for Federation Employment and Guidance Service) had 2,000 employees and an annual budget of about $250 million. Its announcement in December that it had discovered a $19.4 million loss in the past fiscal year — and its subsequent decision to close — was described as a surprise by leaders of other Jewish and general nonprofit organizations.

New York State recently announced that it will transfer FEGS’ behavioral health programs contracts to the Jewish Board of Family and Children’s Services, another UJA-Federation beneficiary agency.

editor@jewishweek.org

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