Karma, the Seaside Heights nightspot and regular “Jersey Shore” location, is bankrupt, listing debts of about $500,000 to the borough, the state and the IRS, plus another $2 million owed to private lenders.

The Feb. 28 Chapter 11 filing, entered in U.S. Bankruptcy Court in New Jersey by Karma’s owner, the Saddy Family, LLC of Port Saint Lucie, Florida, lists public debts of $123,150 to the Borough of Seaside Heights for property taxes and water bills; $371,266 to the New Jersey Economic Development Authority for an unpaid development loan; and $2,585 in civil penalties to the Internal Revenue Service.

Private debts listed by Karma’s owner include a pair of mortgages worth $840,114 and $786,778, both from Shore Community Bank in Manahawken; $109,544 owed to DeRosa Ventures, in care of Parsippany lawyer James Dezao; and a $160,000 loan from Robert Bennett Jr., a Seaside Heights businessman who owns the site of the defunct Merge nightclub.

Karma has been a popular night spot among a youthful and energetic crowd that has earned Seaside Heights a reputation as one of the rowdiest resorts on the Jersey shore. It was a regular haunt of Snooki and other cast members of the “Jersey Shore” reality TV show, who would drink, dance and otherwise fascinate viewers amid its purple lighting and throbbing beats.

But the club was far less popular with Mayor Anthony Vaz and other Seaside Heights officials seeking to shed the borough’s honky tonk image and attract a calmer clientele of families, retirees, and year-round residents. On a particularly spirited night of reveling at the club last May, during a music and lighting show known as Hyperglow, Seaside Heights made several arrests for underage drinking.

Relations between Karma’s principal owner, John Saddy, and the borough have deteriorated. And last year officials moved to revoke the club’s liquor license and effectively shut Karma down, followed by a federal discrimination suit by Saddy asserting the borough is biased against the club’s diverse crowd of young, white, African-American and LGBTQ revelers and the Hip Hop music it plays.

The borough’s effort to close the club and Saddy’s suit are both pending, while the club remains closed as usual during the off-season.

Saddy could not be reached, nor could his sister, Linda, who is named as the managing principal of Saddy Family LLC in in court papers. John Saddy’s lawyer in the lawsuit, Thomas Mallon, did not respond to a request for comment.

Vaz declined to comment on Karma’s bankruptcy filing or the lawsuit. Borough Attorney Jean Cipriani rejected the allegations in the suit, insisting that, “Seaside Heights does not discriminate on the basis of race or sexual orientation or identification.”

In response to the bankruptcy filing, Cipriani said she had only just received a copy, and would have to review the borough’s options for recovering what it was owed by the club, after at least one other creditor got what was coming to it.

“Nobody is ahead of the IRS,” Cipriani said.

Apparently, Karma’s owners paid back only a small fraction of the state EDA loan.

A spokeswoman for the development agency, Virginia Pellerin, said in an email that the Saddy Family LLC had received a $391,973 loan for working capital in 2014 through the federally-funded Stronger New Jersey Business Loan program.

“We will seek repayment of all amounts owed,” Pellerin said.

Steve Strunsky may be reached at sstrunsky@njadvancemedia.com. Follow him on Twitter @SteveStrunsky. Find NJ.com on Facebook. Get the latest updates right in your inbox. Subscribe to NJ.com’s newsletters.