The Chicago Tribune reports:
In an effort to forestall foreclosure on its downtown headquarters, the Lubavitch Chabad of the Loop, Gold Coast and Lincoln Park filed for bankruptcy Wednesday, buying additional time for a donor to bail the Orthodox Jewish organization out of financial straits.
On Wednesday, the same day the brownstone on North Dearborn Avenue that houses Chabad was to go on the auction block, Rabbi Meir Chai Benhiyoun said the group had found a way to pay its debts. All the group needs is a little time, the rabbi said.
Seven years ago, the organization took out a $4.9 million loan to build what was supposed to be a state-of-the-art synagogue and community center at the corner of Chestnut and Clark streets.
As collateral, the group offered the Chabad House of the Loop, where Jewish travelers and members of the Hasidic Orthodox community go for worship, religious classes and meals. The house also serves as a home for Benhiyoun, his wife, Rivka, and their six youngest children.
When the economic downturn caused construction plans to fall apart in 2007, Benhiyoun said its lender, The Private Bank, demanded money up front. The group and bank have been trying to settle the dispute ever since.
“It’s a little bit frustrating,” Benhiyoun said. “We reached an agreement for the amount, but they refuse to give us time to put together the parts.”
But both processes take time, he said. The bankruptcy filing grants Chabad that time.Benhiyoun commended the bank for agreeing to accept a reduced payment of $1.1 million. He added that a donor had agreed to mortgage his own home if the group was able to raise an initial down payment.
Benhiyoun would not disclose the name of the donor.
Rabbi Menachem Mendel Schneerson, the grand rebbe of Chabad, a Hasidic movement focused on education and outreach, set out to establish a Chicago community 25 years ago.
Hasidic Judaism combines ultra-Orthodox observance and mystical Jewish teachings similar to the Kabbalah.
Benhiyoun’s oldest daughter Chaya Moscowitz recently opened a Chabad House in the South Loop.
(Source: Chicago Tribune)