Facing a slew of investigations over problematic mismanagement, a large provider of homeless shelters that has received more than $330 million from New York City since 2012, including $6.9 million this year, announced Monday that it has filed for bankruptcy.
Aguila Inc., which in its heyday operated 40 homeless shelter sites in Manhattan and the Bronx, declared Chapter 11 bankruptcy in a Manhattan federal court filing on Oct. 15 Aguila’s recently installed chief executive officer, Raymond Sanchez, said he shelter provider had little choice after losing all but one of its shelter contracts.
At the same time, it was facing mounting debts and a number of lawsuits — including a complaint filed earlier this year by ex-CEO Jenny Rivera, who was fired amid an investigation by the state attorney general, according to City Limits.
“The immediate benefit of filing is that all current litigation involving Aguila is halted,” Sanchez said in a statement. “My predecessor was incredibly litigious and the plethora of lawsuits squandered resources and inhibited our ability to focus on our mission, which is serving our fellow New Yorkers.”
According to the company’s press release on the matter, filing for bankruptcy enables Aguila to regroup and move forward with its plans to continue to serve the underserved community with necessary services.
“The organization remains in close contact with city agencies and will keep them apprised of our continued progress,” according to the release.
According to the release, the organization had been considering a potential bankruptcy filing as early as September 2019. However, bankruptcy became inevitable last October, when senior New York City officials informed Sanchez that all but one of Aguila’s contracts would be canceled and or reassigned.
Over the course of the last year, Aguila has worked with the city’s Department of Homeless Services (DHS) and other agencies to facilitate the transitions, mitigate job loss and minimize the disruption to clients, according to the release.
Sanchez told PoliticsNY that the organization currently has 28 employees, down from 110 when he came on board in August 2020.
“As the CEO I have to continue the organization and we submitted proposals for [shelter] contracts. If the city determines it no longer wants to give us contracts so be it, but in the meantime, I have to make responsible choices as a manager,” said Sanchez, adding he told DHS as soon as possible about the bankruptcy filing so as to not blindside the city and to give it a heads up.
“Despite our best efforts, it was clear that the more we delved into Aguila, the more we uncovered issues created by the prior administration. As responsible Board members and fiduciaries, we were left with no other option than taking this necessary step,” said Alfredo Angueira, one of the attorneys who joined the Board over the last year.
DHS also did not respond to PoliticsNY inquiries by press time Monday evening.
