The chief executive officer of Goodwill's Toronto-based branch, which shut down suddenly in January amid a cash-flow crisis, says her last-ditch efforts to revive the insolvent charity with new investors have failed.

Keiko Nakamura's announcement on Monday that she sees "no viable option" to pull the organization out of bankruptcy appears to be the final nail in the coffin for Goodwill stores in Toronto and some other communities. Ms. Nakamura said she has not been paid since January, and will now officially step aside as CEO.

"A very sad circumstance, not the outcome that I wanted. And it is sad because I know there is something there that could be salvaged and saved," Ms. Nakamura said in an interview.

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An acute cash crunch forced closing of the charity's thrift stores in January, initially leaving more than 500 employees wondering whether they would be paid. Goodwill's board of directors, made up of business people and community leaders, resigned en mass so they would not be held personally liable for unpaid wages.

Goodwill eventually found the cash to issue the pay cheques, but it still owes the former employees more than $4-million in vacation, severance and termination pay.

Ever since Goodwill filed for bankruptcy last month, Ms. Nakamura and former board members have been working on a plan to reopen some of the stores and save at least a few jobs.

But Monday, Ms. Nakamura said that although several investors whom she would not name were interested, there were simply too many obstacles.

With no assets, Goodwill had trouble finding lenders or donors to provide $2-million in loans to keep a smaller, leaner version alive, with seven stores and 215 staff.

The money would essentially have covered severance and termination costs for the rest of Goodwill's employees. Lenders were offering interest rates above 10 per cent, Ms. Nakamura said in an interview. The risk to any investor willing to try to save the struggling organization, she said, was just too great.

Monday's move means the bankruptcy process will proceed. The trustee appointed to oversee Goodwill Industries of Toronto, Eastern, Central and Northern Ontario (Goodwill TECNO) will be in charge of the decisions regarding the organization's $6-million in debt, which includes at least $4.2-million owed to its former workers, hundreds of thousands of dollars in unpaid rent, and other bills. (Other Goodwills in Ontario and across Canada remain unaffected.)

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According to bankruptcy documents filed in February, Goodwill had just $835,308 in total assets, meaning its creditors are not expected to recover much, if anything, of what they are owed. That number includes estimates of how much Goodwill's inventory of donated used clothes and other merchandise can be expected to bring in when liquidated.

Ms. Nakamura said she will continue to work with the bankruptcy trustee as the process goes forward. A meeting of creditors, including Goodwill's employees, is scheduled for Wednesday.

She cast blame for the failure of the revival efforts on factors that include "restrictions" in Goodwill's collective bargaining agreement with its staff. The revival plan required concessions from Goodwill's union, including giving management the right to reduce staff at stores in winter, when sales are slow.

A lawyer for the union, Denis Ellickson, said concessions to keep Goodwill open were a possibility, but a detailed plan never materialized because Ms. Nakamura was unable to secure a lifeline from investors.

Ms. Nakamura said the U.S.-based international Goodwill's "quick decision" to disown the Toronto chapter after its sudden collapse also made it riskier for lenders or donors to help the Toronto charity because the organization could not use the high-profile Goodwill brand.

Meanwhile, Lauren Lawson-Zilai, a spokeswoman for Rockville, Md.-based Goodwill Industries International, said the organization is still looking into whether it could start anew in Toronto.

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"Goodwill Industries International is continuing to monitor and assess the situation in the territory and will collaborate with other Goodwill organizations throughout Canada and the community to develop a re-entry strategy," Ms. Lawson-Zilai said in an e-mail.

Ms. Nakamura said the resignation of the Toronto branch's board of directors made it difficult to make "timely decisions," which delayed the bankruptcy process. She said quick decisions by landlords to terminate leases were also a factor, noting that a downtown donation centre was quickly turned into a parking lot.