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Wednesday, Feb 28, 2024

VEDC Files for Chapter 11 Bankruptcy

The Valley Economic Development Center Tuesday afternoon filed for Chapter 11 bankruptcy, throwing into question the future of one of the Valley area’s most prominent lenders to small and disadvantaged businesses. The lender listed liabilities between $10 million and $50 million, the same as its estimated assets. Reports have circulated throughout the business community in the last week or so that Alex Guerrero had left as VEDC president, but he could not be reached for comment and those associated with the VEDC did not respond to inquiries. He is still listed as president on the center’s website but he did not sign the bankruptcy petition. It was unclear Tuesday what may happen with the rest of VEDC’s staff. VEDC, based in Van Nuys in the Valley Economic Alliance building, is a small business lender specializing in loans for minority-owned businesses. It is unclear how those loans may be affected, if at all. The VEDC’s largest unsecured creditors include UBS in Salt Lake City with $3.85 million; State Bank of India in New York with $3 million, and Rabo Bank in Visalia with $2.5 million. Local creditors include East West Bank in Pasadena, with unsecured claims of $1 million; Union Bank in Los Angeles, with unsecured claims of $816,100; Citizens Business Bank in Burbank, with $396,250, and the California Community Foundation in Los Angeles with $250,000. Typically in a Chapter 11 filing, the debtor continues operating as the court oversees its financial reorganization. It does not necessarily indicate that the debtor will close. The VEDC has experienced significant top-level turnover in the last three years. Guerrero replaced Ray Valdama, who left last August after about a year in the position. Valdama replaced Quentin Strode, who stayed in the position only about four months. Strode had replaced Roberto Barragan, who had served as chief executive for 17 years and left in October 2016.

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