Buffeted by scandals and a steep drop in government and foundation money, the community-organizing group Acorn is discussed plans to declare bankruptcy, The New York Times reports, citing unidentified Acorn officials.

Pablo Eisenberg, a senor fellow at the Georgetown Public Policy Institute (and a frequent Chronicle contributor), told The Washington Post that Acorn leaders apprised him of plans to file for bankruptcy and form a new, renamed entity.

The move comes as a wave of state and local Acorn chapters have disbanded or severed ties with the national group, some reconstituting under new names. The national organization has been struggling under the weight of a 2008 embezzlement scandal and the fallout from guerrilla videos shot last year by conservative activists that appeared to show Acorn workers encouraging prostitution and tax evasion.

An internal investigation and criminal probes found no wrongdoing, but Acorn’s finances suffered a severe blow as charities and federal agencies that worked with the group on housing and poverty issues cut off grants.

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