Klukwan files for bankruptcy

Move seeks to protect company from liens by creditors.

Anchorage Daily NewsAugust 10, 2012 

The Alaska Native village corporation Klukwan, Inc. has filed a voluntary petition for Chapter 11 bankruptcy.

In a statement submitted to the U.S. Bankruptcy Court in Anchorage dated Aug. 7, Klukwan president Ralph Strong said it was in the best interest of the corporation to seek protection from creditors.

The village of Klukwan, 20 miles from Haines, has a population of less than 100 according to the Alaska Department of Labor. The village corporation has about 250 shareholders.

At one time it was among the wealthiest corporation in the state, distributing payments totalling millions of dollars to its shareholders in some years.

Court documents list major creditors as including Travelers Casualty & Surety, Sterling Savings Bank of Fircrest, Wash., the Internal Revenue Service and the corporation's own Klukwan Education Trust.

In an interview with Margaret Friedenauer of KHNS radio, who first aired the story, Strong said the move was necessary to protect the corporation from having Travelers place a lien on money Klukwan receives from the regional Native corporation, Sealaska, to satisfy a $7 million debt.

Such a lien, Strong told KHNS, would not be allowed under the Alaska Native Claims Settlement Act. However, he added, federal courts will have to make that determination. The decision could have far-ranging implications for every ANCSA corporation.

Strong told KHNS that Travelers was the bonding company for South Coast Construction in Ketchikan, a company owned by the corporation that closed in 2002.

Chapter 11 allows the debtor to reorganize, propose a plan to stay in business and create a schedule to pay creditors over time.


Reach Mike Dunham at mdunham@adn.com or 257-4332.

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