SAN JOSE, Calif.
— Puerto Rico is in the midst of its own financial crisis, as more than 1 million Puerto Ricans struggle to make ends meet amid soaring unemployment and a sharp decline in the island’s social welfare system.
The U.S. territory’s social Gospel social club is shuttering its doors after a bankruptcy filing in August and will likely lose all of its proceeds, its chairman said Tuesday.
The club, which had been one of the largest social enterprises in Puerto Rico, was one of a handful of social enterprises operating in the Caribbean island before it went bankrupt, according to its owner, Maria Sánchez, a former bank executive and entrepreneur.
The group was one one of three social enterprises that filed for bankruptcy protection in late August after falling behind on payments owed to creditors.
The Puerto Rico Social Gospel, based in San Jose, had raised nearly $300 million in venture capital, according the Puerto Rico Economic Development Authority.
Sánches said that total had declined by nearly half since then.
A representative of the company did not immediately respond to a request for comment.
In November, a bankruptcy court in San Juan ordered the closure of the social gospel group’s offices, saying that the company owed creditors more than $1 billion in unpaid bills and had a history of insolvency.
The judge said the social club’s failure to repay creditors would cause it to default on its obligations and could result in its closing.
Sánches said she expected to repay the debt in full by the end of this year, but was still struggling to raise money to do so.
She said she planned to close the club on Tuesday and instead focus on other activities, such as helping other people get jobs or building new social enterprises.
The Social Gospel group, which Sánchiars family founded in the 1970s, has a long history in Puerto Rican society, including founding social clubs and community organizations that helped provide services to low-income families.
But the social organization’s growth has slowed since the economic crisis hit the island.
In 2016, Sánchises company raised just over $6 million from investors and $6.5 million from private sources.
Sanchez, a 33-year-old former investment banker, said she hopes to find another way to survive.
She said she wants to work with others who have similar problems to help them survive.
“There are people who have been here for many, many years who have given their lives,” she said.
“And they need help.”