Experts say GW might not see even a penny of the $450,000 that a local cancer research nonprofit owes it since the firm filed for bankruptcy this month.
The District of Columbia Cancer Consortium filed for bankruptcy on Feb. 13. GW completed a project for the consortium in 2012, which entitles the University to about half a million dollars in return.
The consortium awarded a $2.4 million grant to the University’s cancer institute in 2010 to organize a way to find proper treatment for cancer patients in the area, according to a release. The GW Cancer Institute’s executive director declined to comment.
Lisa Anderson, a spokeswoman for the GW School of Medicine and Health Sciences, said University staff completed the project for the consortium in 2012 by creating the City-wide Navigation Network – and GW was not been compensated. She declined to name the staff involved or estimate the amount the University expects to receive after the case closes.
The Washington Post reported that GW is the largest unsecured creditor involved in the bankruptcy case.
Filings in the U.S. Bankruptcy Court in D.C. show that the company holds virtually no assets and has amassed more than $1 million in debt, despite raking in more than $1 million last year in grants and donations.
In a Chapter 7 bankruptcy case, the nonprofit organization will typically sell all of its assets to pay back its creditors, Columbia University law professor Edward Morrison said.
“If [the financial reports] are taken seriously, no one’s getting anything,” Morrison said. “Creditors aren’t getting a dime.”
The reports list unknown amounts of assets in categories like office furniture and an insurance policy, but those amounts could be negligible compared to its $1 million in debt, Morrison said.
In situations where companies have few assets, “the value is the people who work there,” Morrison said. “That’s not value that can be paid to creditors,” he added.
The consortium is also being sued by its landlord for a failure to pay rent, according to the documents. Unsecured creditors, which are firms other than banks that have extended loans to the company, tend not to get their money back after a firm files for bankruptcy, said Seton Hall law professor Stephen Lubben.
“The average return is zero percent for unsecured creditors,” Lubben said. “[A promise to pay] is only as good as your ability to perform it.”
The consortium’s website lists the GW Mammovan, a mobile unit that has offered breast mammograms since 1996, as a partner. Mammovan Executive Director Karen Navia said the consortium has no ties to the effort now.
“They invited us to partner with them, but we never did it,” Navia said. “I think we attended one fair [for them].”
The District of Columbia Cancer Consortium did not return requests for comment.