After three decades working to draw new businesses to the area, the Coachella Valley Economic Partnership has gone out of business itself.
The nonprofit declared bankruptcy in March, citing nearly $340,000 in debt that it had virtually no assets to pay off. The case was closed early this month, with its creditors being paid nothing.
No one involved in CVEP would comment on the reasons for its failure. But a bankruptcy attorney who’s not involved in the case, after reviewing records, told The Desert Sun it appeared the COVID-19 pandemic was the primary driver of the organization’s demise.
CVEP was a longtime fixture in the valley’s business community. Founded in 1994, it had an ambitious mission: boosting the local economy by attracting new businesses, helping startups grow from the ground up and retaining existing companies.
The corporation managed business incubator Palm Springs iHub, and facilitated business-related events and programs. While its website is no longer operational, the Wayback Machine showed iHub performance metrics that at one point included 175 jobs created, an estimated $5 million annual revenue of its companies and an estimated $23 million invested in its companies.
But roughly three decades after its inception, CVEP appears to have run into financial troubles linked to the COVID-19 pandemic. Its gross revenue was $1,165,211 in 2021, $945,088 in 2022 and $373,907 in 2024, according to court documents.
The corporation filed for Chapter 7 bankruptcy on March 28, with court documents showing it owed creditors a collective total of $338,037.69. Most of CVEP’s debts were to the U.S. Small Business Administration after taking out a little under $300,000 of Economic Injury Disaster Loans in 2020 and 2021.
These loans are designed to help eligible groups suffering from economic injury due to disasters. Many businesses received Economic Injury Disaster Loans during the COVID-19 pandemic — including CVEP.
No assets, no lawsuits
CVEP’s bankruptcy case was closed by a federal bankruptcy judge on May 5, less than two months after it was filed.
Chapter 7 bankruptcy cases involve liquidating assets like property, bank accounts and equipment to pay off creditors. It also means an entity is not staying in business and reorganizing, said Jenny Doling, a Palm Desert-based bankruptcy lawyer not involved with CVEP’s case.
Bruce Whitman, CVEP’s secretary, said the group’s executive committee voted to dissolve in 2025.
Doling added that CVEP did not have anything meaningful to liquidate in order to pay off its creditors.
The desire to avoid litigation appears to have been at least some of the motivation for CVEP to file bankruptcy. Doing so puts an automatic stay in place that prevents creditor collection lawsuits.
CVEP owed roughly $8,500 to American Express National Bank. American Express Travel Related Services Company filed a lawsuit against the corporation in October 2025, but it was dismissed soon after CVEP filed for bankruptcy. Doling said this is common.
CVEP’s board chair Deborah McGarrey did not respond to several calls from The Desert Sun.
Former CEO Laura James, who decided to leave her position in March 2025, directed The Desert Sun to McGarrey for inquiries on the reason for CVEP’s bankruptcy. Other members of CVEP’s staff and executive committee The Desert Sun was able to get in touch with, including Whitman, did the same.
Pandemic loans fuel bankruptcies
Doling said Economic Injury Disaster Loans are currently one of the biggest contributors to the uptick in bankruptcies. Businesses have not been able to make payments now that there are no COVID-19 protections in place and the SBA stopped its hardship payment plan, she said.
“It has stopped taking any offers in compromise for those borrowers who want to settle with the SBA and say ‘Hey, I can’t pay you in full but I want to pay you something,’” Doling said. “They stopped processing those, so they really left a lot of businesses in a very bad position with no options other than to file bankruptcy and close.”
Commercial business bankruptcies were up 189% and individual consumer bankruptcies were up 87% from January 2022 to April 2026, Doling added, citing data from Epiq. She said the SBA was already shorthanded before the federal government’s plan to shut down the U.S. Department of Education and transfer student loan collection to the SBA.
This essentially means the SBA doesn’t have enough staff to work with businesses on how they can pay back their loans.
“It’s not good for the government on collecting these loans and it’s not good for the businesses,” Doling said. “They’re just on auto-collections.”
This article originally appeared on Palm Springs Desert Sun: Nonprofit aimed to help Coachella Valley businesses. Now it’s bankrupt
Reporting by Ani Gasparyan, Palm Springs Desert Sun / Palm Springs Desert Sun
USA TODAY Network via Reuters Connect
