The Exchange Club of Naperville, the group behind Naperville’s longtime Ribfest, and its associated charitable branch filed for bankruptcy Tuesday, the same day it announced on Facebook that Ribfest would be no more.
In two separate filings, the club and charitable organization filed for Chapter 7 liquidation bankruptcy in the Northern District of Illinois U.S. Bankruptcy Court in Chicago. Court documents list the two entities as owing more than $370,000 to 19 unsecured creditors.
The Exchange Club of Naperville, established in 1987, has discontinued any and all operations, according to Thomas Springer, the Wheaton-based lawyer representing the organization in the proceedings.
“The club will cease to exist,” Springer said. “All operations will cease. There won’t be any Ribfest. There won’t be any charitable organization.”
The club’s website and Facebook page appear to have been deleted.
In a Facebook message posted earlier this past week, the Exchange Club cited high costs following the COVID-19 pandemic as the reason behind its decision to scrap Ribfest. No mention of bankruptcy filings or liquidation was made but the post did reference the group’s charitable work over the past three and a half decades.
“We can be proud of the years of service we have given to our town and families,” the post said. “Our impact will live on in our community because of our years of dedication and service to our community.”
Tax filings show the Exchange Club’s charitable arm had been under financial strain for several years.
The organization incurred a net income loss every year between the fiscal years ending in 2018 to 2022, according to its annual IRS 990 Form filings, accessed through ProPublica’s Nonprofit Explorer database. The 2022 tax form, the most recently available filing, reported a net income loss of $745,561.
Going back a decade, the organization’s revenue and expenses often fluctuated, filings show. Between the fiscal years ending in 2015 and 2017, the organization had made a profit but saw losses in the three years prior that.
Since 2017, its net assets have been on a steady decline, according to filings. Between 2017 and 2022, the organization’s net assets dipped from $2.74 million to less than zero.
IRS 990 Form filings also offered a glimpse at how profitable Ribfest had been for the organization in recent years. In 2012, gross receipts from the festival totaled more than $3 million and cost just over $2.5 million to run, leaving a difference of nearly $488,000.
Gross receipts continued to outpace expenses through 2018.
But in 2019, while Ribfest brought in $3.22 million, expenses totaled $3.4 million. The next time Ribfest was held in 2022 — returning after two years of COVID cancellations — it accrued $1.86 million in gross receipts and racked up $2.4 million in expenses, a difference of more than $553,000.
Springer said the Exchange Club reached out to his firm earlier this spring “when they could see that the numbers were adding up to not being able to continue.”
“It just got too expensive for them to run,” he said. “And of course, it’s a great group. Nobody wants to do it, but it’s an economic decision. They’re all volunteers. Always has been. But with too many expenses being paid, they couldn’t keep up with it, you know. And of course, creditors that are owed money still want their money.”
The Exchange Club Board of Directors passed a resolution July 1 to voluntarily file for bankruptcy liquidation as a club and charitable organization, court documents show. The resolution is dated almost exactly three weeks after Exchange Club President Emy Trotz told the Naperville Sun June 10 that there wouldn’t be a Ribfest 2024. At the time, she declined to say if it would return.
With bankruptcy proceedings filed, assets will be reviewed to see what money can be distributed back to creditors, Springer said.
Creditors include the Daily Herald, which has an unsecured claim of $10,000, as well as the DuPage Event Center & Fairgrounds, where Ribfest had been held for the past two years after being forced to leave its longtime venue at Naperville’s Knoch Park. The fairgrounds has an unsecured claim of $60,000, according to court documents.
Filing for bankruptcy stops all pending collection activities, Springer said.
The Exchange Club of Naperville was chartered in 1987. Its mission was to raise money to end domestic violence and child abuse. Since its launch, the club went hand-in-hand with Ribfest. For decades, the multiday affair featuring award-winning rib vendors and live music by well-known performers reigned as the crown jewel of summer schedule in Naperville.
The festival would draw in thousands from all over the Chicago area and beyond. Funds raised by Ribfest typically went to local charitable organizations that supported the Exchange Club mission.
Speaking to both the end of Ribfest and Exchange, Springer said, “It’s kind of collective of a lot of bad things that happened all at once.”
“I don’t know when the problem necessarily started,” he said, “but I know that the current snapshot is reflective of something that was gradually and unfortunately declining for years, a couple years at least.”
