Abstract:
In November 2011, the State Fair of Virginia, Inc. (SFVA), which had been operating since 1854, was facing a dire financial situation. SFVA was a privately held, not-for-profit organization that operated the state fair independent of the state government, and received no operating support from state or local governments. In 2003, the organization had borrowed $83 million against a $47 million investment portfolio in order to develop its new fairgrounds, which opened in 2009. The new site had been attractive because it included The Meadow Farm, a horse farm famous for being the birthplace of the Secretariat, winner of the 1973 Triple Crown. The unprecedented collapse of the financial markets in the United States in 2008, combined with a poor economy and terrible weather for the fair’s first two years, resulted in a situation where in late 2011 the organization did not bring in enough income and donations to cover the loan payments. Creditors were demanding an immediate solution. The board of directors of SFVA realized that it had no choice but to consider strategic options including applying for Chapter 11 bankruptcy, which would give it time to try to restructure its debt, or shutting down immediately.
Keywords:
Bankruptcy, Non-profit Organizations, Operations, Strategy Formulation, Risk Analysis, Strategy Execution, United States, State Fair of Virginia Case Solution
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