In September 1980, the Seattle Psychoanalytic Institute filed a petition for bankruptcy under Chapter 11 of the federal Bankruptcy Code. This action will allow the corporation to reorganize itself in an attempt to resolve outstanding debts resulting from a Superior Court judgment on behalf of an aggrieved student.

Another aspect of the reorganization is the curtailment of most of the Institute's activities, including publication of its Bulletin, courses for candidates and fund raising. However, its Board of Trustees will continue to function, supervising the corporation's limited activities. Students and members of the community will be able to pursue their interest in psychoanalytic and psychotherapy training through the Psychoanalytic Association of Seattle (P.A.S.), which has made available programs of relevance and appropriate quality.