Fire Safe Council files for bankruptcy
November 21, 2012
The financially troubled Nevada Fire Safe Council filed a voluntary petition this week with the U.S. Bankruptcy Court seeking to essentially go out of business and liquidate its debts.Reno bankruptcy lawyer Kevin Darby filed the Chapter 7 petition. That chapter of federal bankruptcy law is designed to liquidate businesses and, in this case, non-profit corporations. The filing listed liabilities of up to $10 million and assets of anywhere from zero to $50,000 for the Zephyr Cove non-profit.According to filings with the bankruptcy court in Reno, a meeting of creditors will be held at the Young Building on Booth Street in Reno on Dec. 27. Allen Dutra is expected to be appointed trustee at that meeting.The council, established in 1999, shut its doors last spring after a federal audit released in February revealed irregularities in how it handled grant funds. The council’s purpose was to funnel grants from the U.S. Department of Agriculture, Nevada Division of Forestry and U.S. Forest Service to Tahoe Basin homeowners. The grants were part of an effort to help residents in 135 different communities create defensible space around their homes to prevent wildland fire damage.When the council shut down operations, board Chairwoman Joan Presley said the move was necessary because there was no money left to pay the rent. Auditors from the USDA’s Inspector General’s office found that the council wasn’t properly accounting for grant funding awarded by the Forest Service, including $3.6 million in recovery act money and $6.2 million in other grant funding. While auditors said there was no indication that any fraud had occurred, the report condemned lax oversight and internal controls by the council.Auditors began investigating the fire council after a hotline caller complained in July 2011 that competitive bidding wasn’t used to hire contractors.