Broadreach Family and Community Services, which announced it was closing late in May, filed June 4 for Chapter 7 bankruptcy with the U.S. Bankruptcy Court in Bangor. Broadreach had been providing pre-K services to Regional School Unit 71.

The Belfast-based organization listed liabilities of $676,227, largely the mortgages on its Stephenson Lane office property in Belfast and its Youthlinks property in Rockland. The organization also owes nearly $124,000 to the state in unpaid taxes.

The Maine Bureau of Revenue Services filed liens Feb. 4 in both the Knox and Waldo County registries of deeds for unpaid service provider taxes from 2015 through 2018. The amount of tax unpaid was nearly $90,000, with penalties and interest bringing the total tab to $123,927.

The Broadreach board held a special meeting May 28 and gave the go-head to file for bankruptcy.

Broadreach's abrupt closure sent RSU 71 administrators "scrambling" to arrange to finish out the pre-K school year and make arrangements for incoming classes in the fall. Pre-K teachers voluntarily worked without pay for the final days. Board of Directors Chairwoman Caitlin Hills said Tuesday that RSU 71 paid Broadreach for pre-K services "and was surprised when the services were abruptly ended."

"It appears that there was some mishandling of funds," she said.

During its meeting June 24, the RSU 71 board considered three pre-K options for fall presented by Superintendent Mary Alice McLean. Representatives voted 5-3 to provide four classes, two at Gladys Weymouth Elementary School in Morrill and two at East Belfast School, Hills said.

The board appropriated $62,400 from its contingency fund, over and above the amount approved for Broadreach pre-K services in the 2019-20 budget, to cover pre-K program costs for the next school year, Hills said. Each pre-K class will accommodate up to 16 students.

"We felt this was important, because pre-K is such a crucial developmental tool for kids to succeed in their academic lives," Hills said Tuesday.

The Broadreach bankruptcy filing lists assets that include the two properties, two paintings worth a total of $32,000, cash in the bank of nearly $22,000, and receivables of $106,000.

There is also about $300,000 owed to numerous creditors, for which there is no property attached as collateral. A meeting of creditors is scheduled for July 9.

Attorney Nathaniel Hull of the Portland law firm of Verrill Dana is the trustee for the bankruptcy filing.

Sharon Goguen, chairman of the Broadreach board, filed a statement with the court, saying that the bankruptcy filing was in the best interests of the corporation.

As late as Feb. 25, Broadreach Executive Director Todd Goodwin offered no hint of the financial distress faced by the nonprofit organization. Goodwin responded to a newspaper article about the state liens.

"Broadreach remains a viable and robust agency providing much-needed services to many hundreds of vulnerable individuals and families throughout the Midcoast. The agency is in good standing with our state partners," he said.

Three months later, the closure was announced.

"The diverse array of services offered by Broadreach Family & Community Services has been an integral part of the Midcoast area’s social safety net," agency officials said in the May 25 press release. "The agency has been honored to work with its clients, partners, stakeholders and friends to promote the health and well-being of the community."

Goodwin told Bangor Daily News in May, “We, the board and staff, collectively put forward any number of bold efforts to overcome any number of historical challenges. We just got to a point where the cost of doing our business exceeded our available revenue. We just had to make the very, very hard choice to recognize that reality.”

RSU 71 Superintendent McLean, Curriculum Director Laura Miller and Finance Director Chandra Hodgdon met with Goodwin and Gail Jones-Wilkinson of Broadreach May 22 and were advised that pre-K would end that very day.

Miller said in an email message Tuesday that the administrators “requested that classes run until the following Thursday, May 30th, so that teachers and students would have closure and parents would have time to arrange for daycare. The original last day had been scheduled for June 6th. We also requested that teachers be given Friday, May 31st, to close up their classrooms. Todd and Gail agreed.”

A week later Broadreach told administrators it could no longer pay its pre-K teachers, and there would be no pre-K for the rest of that week (May 29, 30 and 31), Miller said.

“Pre-K teachers informed us (through principals) that they would work the last three days with no pay because it was the right thing to do," Miller said in her email. … "I believe all lead teachers showed up for work on Wednesday, Thursday (last student day) and Friday to close up the classrooms."

Hills said RSU 71 couldn't legally or contractually pay the pre-K teachers directly for those days, but said, "We did pay Broadreach to pay them."

Broadreach's real estate assets consist of two buildings. The Youthlinks building is a 2,300-square-foot building on a quarter-acre assessed by the city of Rockland at $209,700. The Broadreach headquarters building on 2.69 acres at 5 Stephenson Lane (corner of Route 1) in Belfast is assessed at $408,800.

The agency sold a second building, at 8 Stephenson Lane in Belfast, last year to the owners of Paws and Claws pet grooming.

The latest income tax returns filed by Broadreach show losses. The organization had $173,000 in expenses over revenues in 2017 and losses of $51,000 in 2016.