The Los Angeles County Bar Association notified its members by email last Friday that the organization could be forced to file for bankruptcy if it can’t reach a settlement for its unpaid office rent.

LACBA says it has not paid rent since March and currently owes over $1.1 million on the building which sits on the northeast corner of Seventh and Bixel streets near downtown LA.

The organization, representing 16,000 members, says it would prefer to seek restructuring using a Subchapter V proceeding under Chapter 11 as opposed to a Chapter 7 liquidation.

“For years, LACBA has been working diligently to control its operational costs,” the company-wide email said. “With the exception of its long-term commercial lease at 1055 West Seventh Street, Los Angeles, those efforts have been largely successful. For some time now, LACBA has been trying to renegotiate its lease with its landlord. Negotiations with the landlord continue.” If  those negotiations do not reach a satisfactory outcome in the near future, LACBA, like many enterprises and organizations in 2020, is exploring a “possible strategic restructuring” of its debt to get out of the burden of paying its lease.

The organization says that if they are granted protection under Chapter 11, it would continue to operate in a “Business as usual” manner. LACBA, which was established in 1878, says it will continue to provide high quality, low-cost CLE as well as virtual events and programming featuring thought leaders and members of the judiciary.

“LACBA’s Sections, Committees, Counsel for Justice, Lawyer Referral Service (SmartLaw), Attorney-Client Mediation and Arbitration Services, and the indigent defense programs would continue uninterrupted,” the email said. “In short, virtually every aspect of LACBA as you know it will continue to operate as usual, and we will continue to serve our members to the best of our ability.”

The dire situation facing the LACBA is largely due to the pandemic barring programs with live, in-person attendance that has contributed to revenue losses on top of a costly lease that won’t be up until 2025. Since 2017, the group’s only been using one of the two floors on the downtown building it leasing, trying to find tenants to fill the bottom floor. Currently the lease payments are more than $100,000 a month, the organization said.

 

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