Jane Addams Hull House Association will be out of business Friday, leaving employees and clients scrambling to fill a void the 122-year-old organization will leave.

Despite announcing last week plans to close in March, board Chairman Stephen Saunders said Wednesday that the organization will fold this week because it can no longer afford to stay open. He also said Hull House plans to file Friday for bankruptcy.

"There was just no alternative," he said. "We have to close our doors or we would owe more people money."

Saunders said he couldn't say how much the organization owes but estimated the debt to be in the "several millions."

The organization, first formed in 1889, has provided foster care, domestic violence counseling, child development programs and job training to 60,000 children, families and community groups each year.

Those clients will be referred to other social service agencies, Saunders said.

Anne Sheahan, spokeswoman for the Chicago Department of Family and Support Services, said her organization got word Monday that some Hull House child care sites closed, and the rest will close Friday. The department had funded those Head Start programs.

"We are working to identify new providers to pick up those services," Sheahan said.

Estela Coronel, 31, said she was told Monday her 41/2-year-old daughter Suzette's Hull House child care facility would close.

"More than mad, I'm sad because of (Suzette)," she said. "She loved to go to school. She woke up yesterday and said, 'Mommy, I'm ready to go.'"

On Jan. 19, the agency announced it would close this spring. But by the following day, Saunders said, the board realized Hull House did not have enough funds to pay employees beyond January, and the decision was made to close in a week.

With government funding taking a hit and the need for services climbing, Hull House's revenue dropped from $40 million in 2001 to just $23 million in June.

"We could not possibly raise enough money to sustain the organization," Saunders said.

Hull House's 300 employees learned Friday that they would soon be out of work, said Tamara Faulkner, a social worker with the organization's Family Works program.

Employees were aware there were financial problems but didn't realize they'd lose their jobs this week, she said. In November, employees received a paycheck with seven days' pay instead of 10. The remaining pay was sent in a check the following week, Faulkner said.

Hull House still owes employees a total of more than $27,000 in expense reimbursement checks, according to union officials.

Connie Mitchell, head of the National Organization of Legal Service Workers Local 2320 — the union that represents about half of Hull House employees — said the organization violated its union contract by not giving employees at least 40 days' notice. The union is weighing its legal options, Mitchell said.

kthayer@tribune.com