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March 19, 2015

Floundering N.Y. Human-Service Charity Files for Bankruptcy

New York's Federation and Employment Guidance Services, which announced plans in late January to shut down in the face of a $19 million budget shortfall, filed for bankruptcy Wednesday, the Jewish Telegraphic Agency and Capital New York report. The nonprofit, widely known as FEGS, said it was in the "final stage" of transferring its programs to other providers and that the Chapter 11 filing would help insure the "uninterrupted continuation" of its services.

FEGS is one of the country’s largest Jewish social-services agencies, with 2,000 employees and a $250 million annual budget fueled largely by government contracts. New York City and State officials are investigating the organization's collapse, which media reports have pinned in part on risky financial behavior aimed at supporting a major expansion.