More details are filtering out about the bankruptcy of the Hawaii State Teachers Association Member Benefits Corporation:
“In the process of closing out MBC’s books to meet the legal requirements for dissolution, an outside team of attorneys and certified public accountants found that MBC activities and finances had been grossly mismanaged,” the union said in a statement to members.
The Honolulu Star-Bulletin reports the corporation has more than 50 creditors, including the Internal Revenue Service, Hawaii Department of Taxation, the U.S. Postal Service and Panda Travel.
The Pacific Business News adds that HSTA fired everyone, but the new administrative firm, Associated Third Party Administrators, rehired everyone except the two executives, company president Raymond Sodetani and treasurer Rodney Shinno, so I guess we know who will be holding the bag for this one.
The bankruptcy filing lists both assets and liabilities as being between $500,000 and $1 million. Tax documents obtained by Intercepts show that in 2007 the HSTA Member Benefits Corporation reported $1,182,307 in total income and $809,831 in assets at the end of the fiscal year. Additionally, HSTA listed a $30,000 investment in MBC for 2007. No further details were available.
The operations and funds of the union and the corporation are not co-mingled, but the company was a large enterprise relative to the size of HSTA – the union itself took in only $6.3 million in dues in 2007 – and overseen by a board of HSTA representatives.