The health care think tank founded by Republican presidential candidate Newt Gingrich has filed for Chapter 7 bankruptcy.
The Center for Health Transformation (CHT), headed by chairman Nancy Desmond, filed for bankruptcy in Atlanta, according to the Atlanta Business Chronicle. Gingrich sold his share of the CHT and Gingrich Group to the CHT May 10, 2011, and relinquished any legal connection with them.
The center will go out of business in light of liabilities between $1 million and $10 million and between 50 and 99 creditors, according to the Associated Press. The group had assets of only up to $100,000, the AP reported.
One source familiar with the group told ABC News that the bankruptcy was "not surprising." "In reality," the source said, the group was "a personal service deal, companies paid for him, when there was no more him, no more company."
CHT is described on its website as "a high-impact collaboration of private and public sector leaders committed to creating a 21st Century Intelligent Health System that saves lives and saves money for all Americans."
Gingrich founded Gingrich Holdings with other partners, the umbrella under which CHT operated. The bankruptcy should show the public how vital Gingrich's leadership was to the center, his legal counsel, Stefan Passantino, told ABC News.
"This shows how integral his leadership is to the organization," Passantino said. "People were paying money to be in the room with Newt to think through policy solutions. When he could no longer be in the room because of campaign finance laws, it doesn't say anything negative but rather something positive about his leadership and shows how integral his leadership really is."
Passantino said bankruptcy will have no impact on Gingrich's candidacy for president. "This clearly has no negative impact on his ability to campaign on a process or technical standpoint," he said. "It shouldn't be viewed as weakening his candidacy. In no way does it show his inability to govern."
Gingrich's former communications director, Rick Tyler, now a part of the pro-Gingrich super PAC Winning Our Future, echoed Passantino's sentiment. The "complex and ambitious" project for health care was "the exact opposite of Obamacare," he told ABC News.
"There are very few people capable of successfully leading such an organization. It's unfortunate, but not surprising, that without Newt Gingrich's leadership, the organization failed."
The CHT was in the news at the height of Gingrich's rise in the polls because the center held Gingrich's consulting contract with Freddie Mac and later released a portion of the contract. The CHT's media relations director, Susan Meyers, could not be reached for comment.