Valley Swim Club president John Duesler sent an e-mail to club "friends and families" Friday saying the board of directors had voted 5-1 to file for Chapter 7 bankruptcy this week, The Philadelphia Daily News reported.
"While many will point towards our legal situation and negative media exposure this summer as the reason, the truth is that the club has struggled to stay out of the red for at least the last decade," the newspaper quoted Duesler's e-mail as saying.
"Despite our most ambitious efforts and countless hours of dedication towards the club, we have been unable to grow our membership enough to sustain The Valley Club any longer," he said, according to the newspaper. "Indeed, we have not been profitable, for as long as I've been with the club. And our current debt from this year's operation and legal fees now exceeds $100,000."
Members "are all tired and beaten down and just sickened by how our club has been improperly portrayed," he said, according to the Daily News. "After speaking to many members, my sense is that mostly everyone wants to move on."
Duesler declined comment to The Associated Press on Saturday.
The Creative Steps day camp had arranged for the youngsters to swim each Monday during the summer. But during the first visit on June 29 by 56 children - 46 black and 10 Hispanic - two youngsters reported hearing racial comments, and the day camp's payment was later refunded, according to the Pennsylvania Human Relations Commission.
The commission said in a 33-page decision in September that it had found probable cause to conclude that the campers were asked not to return because of the "racial animus" expressed by one member and "racially coded comments" by other members.
"I am taken aback right now. It really comes as a surprise," Creative Steps director Alethea Wright told the Associated Press on Saturday when told about the reported bankruptcy plans. She referred other questions to the day camp's attorneys, who did not immediately return calls seeking comment.
Attorney Brian Mildenberg, who represents two families in a class-action lawsuit, told the newspaper that a bankruptcy filing would freeze civil litigation but would not affect ongoing proceedings by the commission. The U.S. Department of Justice has also said it is looking into whether the club broke the law.
The Valley Club has maintained that there were too many children for the number of lifeguards on duty and that only a few of the children could swim. A club attorney also said it had offered to reinstate the campers for the rest of the summer or guarantee them free memberships next year.
The state commission, however, said other large groups that came to the swim club did not elicit a similar reaction, and the club had no black members among 334 paid memberships for the last two years.