SEIU Texas has filed for bankruptcy, just months after being found responsible for utilizing deceptive tactics aimed at driving a Houston cleaning company out of business.

During the trial brought about by Professional Janitorial Services, it became evident that SEIU was morally bankrupt. Now they’re claiming financial bankruptcy as a Harris County District Judge has ordered the disgraced union to pay a $7.8 million judgement for their smear campaign.

A jury in Judge Erin Lunceford’s court found the SEIU guilty of disparagement. In a 10-2 vote, the court awarded PJS $5.3 million in damages. Since the case has been ongoing for nearly a decade, interest of 5 percent per year was added, bringing the total judgement owed by SEIU to $7.8 million. In addition to damages, the court ordered the union to pay all taxable court costs, plus interest on the awarded amount of $1,000 per day.

As expected, the SEIU has appealed the decision.

Texas law requires a defendant seeking an appeal to set a security – or bond – equal to the amount awarded in damages, interest for the duration of the appeal, and costs awarded in the judgement.

The union estimated that the amount needed to be set aside, including costs incurred during the duration of the appeal, would be $8.2 million. Their appeal filing read, “Local 5 cannot afford to pay anything close to that amount given its current distressed economic circumstances.” The SEIU is claiming that the maximum amount that they could set aside, without causing “substantial economic harm,” would be $100,000 or a little over 1 percent of the estimated amount.

After failed attempts to fight the judgement they filed for Chapter 11 bankruptcy at the U.S. Bankruptcy Court in Corpus Christi, according to a report in the Wall Street Journal.

In a statement, SEIU Texas President Elsa Caballero said, “This filing ensures that our union will remain open for business.” Onlookers are left wondering: if the union can’t afford to operate legally, should they not simply get out of the “business?”

An audit determined the local SEIU “operates at a significant annual deficit unless subsidies and reimbursements are received from outside sources.” The union’s international arm has been subsidizing the local shop to the tune of roughly $3 million every year since 2013, a crutch that’s expected to disappear at the end of this year.

In a statement, PJS chief executive Brent Southwell said, “You cannot pay 10 lawyers to try to stop me from beating you in a courtroom and then claim you have no money.” PJS plans to continue to pursue information from the union to ensure they are not hiding money to avoid paying the judgement. “The SEIU won’t escape its fate after attacking my company.”

The union is still appealing the judgment and pursing their bankruptcy filing. For those reasons, according to the union, PJS’s damages and court costs remain unpaid.

Charles Blain

Charles Blain is the president of Urban Reform and Urban Reform Institute. A native of New Jersey, he is based in Houston and writes on municipal finance and other urban issues.