PHOENIX (AZFamily) — Phoenix Pride, the organization behind one of Arizona’s largest LGBTQ+ celebrations, has filed for Chapter 11 bankruptcy.
The nonprofit calls the filing a financial restructuring, citing rising operational costs and declining sponsorships and fundraising support. In recent years, Pride organizations across the country have either shut down or made substantial cuts as funding has tightened.
Executive Director Mike Fornelli discussed the issue in late January, after Tucson Pride closed unexpectedly, pointing to the broader impact of diversity, equity and inclusion-related cuts on corporate giving.
“With all those DEI cuts and those funding cuts, it’s a trickle-down effect, right?” Fornelli said. “So there’s still businesses. There’s still companies to support, but now they don’t have that money to be able to support the capacity that they could.”
Bankruptcy attorney Howard Meyers said Chapter 11 filings have become more common for nonprofits.
“It happens with great frequency,” Meyers said. “A more common occurrence in the not-for-profit world today than it was a couple of years ago is money has tightened up.”
Court documents list three creditors totaling just over $432,000. The largest claim is about $418,000 owed to Pride Group LLC of Chandler. Meyers said that if a judge approves the petition, Phoenix Pride could either stretch payments over time or reduce the amount owed.
“There’s two tools,” Meyers said. “The first tool is to stretch out the payments over time. The second tool is to reduce the amount that is owed.”
Pride Group LLC filed a lawsuit in March against Phoenix Pride, alleging breach of contract. Pride Group LLD said they have been owned money since the October 2025 Festival. The organization also said Phoenix Pride continued to move forward, producing and fully funding its March 2026 Rainbows Festival while the October 2025 balance went unpaid.
“We’re a family-owned Arizona business, and that balance is real work by real people. We offered Phoenix Pride a fair repayment plan months ago. We’ll pursue what we’re owed through the proper legal process and trust the court to weigh the facts.” Pride Group LLC said in a statement.
Meyers said the bankruptcy filing would automatically pause the case.
“It is automatically stayed,” he said. “It’s enjoined from — they’re enjoined from proceeding.”
Meyers added that the dispute would not necessarily be at a standstill in the long term. Phoenix Pride also says the filing does not mean events scheduled for Pride Month will stop.
We reached out to Fornelli for an interview. He initially agreed but later canceled, citing a change in availability.
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