Valley Swim Club president John Duesler sent an e-mail to club "friends and families" Friday saying the board of directors had voted to file for Chapter 7 bankruptcy this week, The Philadelphia Daily News reported.
Duesler wrote in the e-mail that many would blame the bankruptcy on legal proceedings and negative media exposure, the newspaper said. But, he said, "the truth is that the club has struggled to stay out of the red for at least the last decade" and owes more than $100,000 in operational expenses and legal fees, the newspaper reported.
Duesler declined to comment to The Associated Press on Saturday.
Members "are all tired and beaten down and just sickened by how our club has been improperly portrayed," he said, according to the Daily News. "After speaking to many members, my sense is that mostly everyone wants to move on."
The Creative Steps day camp had arranged for the youngsters to swim at the Huntingdon Valley club each Monday during the summer. But during the first visit in June by 56 children – 46 black and 10 Hispanic – two children reported hearing racial comments, and the day camp's payment was later refunded, according to the Pennsylvania Human Relations Commission.
The commission said in a decision in September that it had found probable cause to conclude that the campers were asked not to return because of the "racial animus" expressed by one member and "racially coded comments" by other members.
"I am taken aback right now. It really comes as a surprise," Creative Steps director Alethea Wright told the AP on Saturday when told about the reported bankruptcy plans.
Brian Mildenberg, an attorney for the children in a lawsuit against the swim club, told the AP the bankruptcy filing puts a temporary stay, or hold, on the suit filed against the club.
"However, the human relations discrimination proceedings, as well as the lawsuits, would be allowed to proceed if the bankruptcy court grants relief," Mildenberg said.
The Valley Club has maintained that the number of children exceeded the number of lifeguards on duty and that only a few of the children knew how to swim. A club attorney said it had offered to reinstate the campers for the rest of the summer or guarantee them free memberships next year.
The state commission, however, said other large groups that came to the swim club did not elicit a similar reaction, and the club had no black members among 334 paid memberships for the last two years.
Information from: Philadelphia Daily News, http://www.philly.com