The Hollister Independence Rally Committee, which organized the
city’s signature event for nine years, has filed for bankruptcy
after giving thousands of dollars to local charities, but before
paying more than $350,000 to 94 creditors, including vendors, phone
companies and the city.
Hollister – The Hollister Independence Rally Committee, which organized the city’s signature event for nine years, has filed for bankruptcy after giving thousands of dollars to local charities, but before paying more than $350,000 to 94 creditors, including vendors, phone companies and the city.
HIRC’s bankruptcy combined with the cancellation of the 2006 Hollister Independence Rally will hurt dozens of local charity organizations, which could be sued in subsequent court hearings over money given to them by HIRC before it paid it’s bills. The news is also bad for more than 50 vendors who gave HIRC thousands of dollars to reserve spots for the rally this summer.
HIRC, which was set up in part to funnel rally money to local charities, spent the majority of the $455,000 it earned last year paying for staff, security, entertainers, merchandise and traffic control, according to Hollister City Manager Clint Quilter. And although the nonprofit organization reimbursed the city for $57,000 in rally costs last year, it still owes Hollister more than $250,000 for law enforcement, Quilter said. That’s money the city isn’t expecting to get back.
“I’d actually be surprised if we did get it back. They have no way to generate money,” Quilter said Thursday. “We’d certainly like to recover that money, but I don’t have any hard feelings.”
Many of HIRC’s creditors feel the same way. Kent Mortimer, owner of Sacremento-based motorcycle apparel company Renegade Classics, won’t miss the $1,000 or so he threw down for a deposit. However, he will miss out on something far more valuable.
“This was one of our major events,” Mortimer said. “We’re probably going to lose $40,000 in profits from the cancellation.”
Mortimer doesn’t fault HIRC for the bankruptcy, he believes exorbitant law enforcement costs are to blame.
“It’s been over policed,” he said. “They are paying a lot of guys to look at bikes and girls that don’t need to be there.”
HIRC officials and HIRC treasurer John Loyd, did not return calls to the Free Lance on Thursday. However, in the three months before filing for bankruptcy, HIRC did manage to pay $6,405 to its executive director Helen Nelson, according to court documents.
Rotarians are feeling the pinch, said Hollister Rotary President Will Sutton. His organization has netted somewhere between $35,000 and $50,000 annually – which it donates to local charities – from operating the beer garden during the Fourth of July rally. Sutton said the group will continue to fund the Mattson Endowment, which benefits local school athletic programs, and the $20,000 it offers in college scholarships each year. But, as for the dozens of other organizations the Rotarians support, Sutton isn’t so sure.
“I’m sure they’re going to be hurting,” he said. “It’s been tough – it means we’re going to have to come up with new ways to bring in money, but we’re going to try like heck to make sure the scholarships don’t suffer.”
HIRC’s bankruptcy attorney Michael Malter didn’t return phone calls Thursday, but attorney Joe Thompson, who has experience in bankruptcy law, said even the money the committee gave to charities last year could be in jeopardy as creditors seek payment from HIRC.
“A bankruptcy trustee can recover that money,” he said. “It would be pooled into estate and used to pay off creditors.”
Lou Bettencourt, director of the San Benito County YMCA, isn’t too concerned about the $1,200 HIRC donated to the organization last year. HIRC, he said, would always be appreciated.
“A lot of people put a lot of hard work into that,” he said. “And for that, I’m sad.”
Vendor Chuck Frederick, owner of Renegade Wheels in Orange, won’t miss his deposit money, but he will miss that sales volume that could have been generated by displaying his custom motorcycle wheels at the rally this year.
“It’s hard to quantify how this will affect our sales – the Hollister rally is our best event every year,” he said. “We would consider coming back in the future, but we’d want a personnel guarantee that something like this wouldn’t happen again.”
Typically, 90 after filing for bankruptcy, a court would wipe out the majority of HIRC’s debt, according to the American Bankruptcy Institute.
Brett Rowland covers public safety for the Free Lance. He can be reached at 831-637-5566 ext. 330 or br******@fr***********.com.
