In a development that has received little attention, the Wanda Alston Foundation, which took over management of Casa Ruby, a D.C. LGBTQ community service group, in August 2022 under the role of a court-appointed trustee. , Casa Ruby filed for bankruptcy on August 27th of this year.
The petition, filed in U.S. Bankruptcy Court for the District of Columbia, says Casa Ruby has debts to at least 50 creditors totaling more than $1 million and assets valued at between $0 and $50,000. .
Nick Harrison, an attorney representing the Wanda Alston Foundation, which provides housing services to homeless LGBTQ youth, said Casa Ruby currently does not hold any financial assets, including cash.
He said the estimated assets of up to $50,000 in the bankruptcy filing will be determined by the Alston Foundation in December 2022 against eight former Casa Ruby directors and Casa Ruby founder and former executive director Ruby Corrado. It said it was based on a pending lawsuit filed. The lawsuit accuses the board of violations. DC failed to provide oversight over Casa Ruby’s operations, violating nonprofit corporation law, leading to its bankruptcy and closure in 2022.
The lawsuit asks the court to award Collado and the former director “compensatory damages, compensatory damages, punitive damages, license fees and costs, litigation costs, attorney’s fees and costs, and such compensation as the court deems necessary and appropriate.” It seeks payment of “other relief measures.” ”
On May 1, 2023, a Washington, D.C. Superior Court judge dismissed the lawsuit brought by the Alston Foundation against all but one former Casa Ruby board member, but not the lawsuit against Collado.
The Alston Foundation has appealed the ruling dismissing the lawsuit, which is currently pending in the Washington, D.C., Court of Appeals.
The suit also alleges that the board failed to adequately oversee the actions of Mr. Collado, who pleaded guilty to wire fraud charges in July as part of a plea deal offered by prosecutors.
The indictment to which Ms. Corado pled guilty in U.S. District Court in Washington, D.C., alleges that she took at least $150,000 in “taxpayer-supported COVID-19 emergency relief funds” given to Casa Ruby to “private sources for personal use.” It is suspected that the money was diverted to an offshore bank account. Statement released by the U.S. Attorney’s Office.
Corrado initially denied the charges, but was arrested by the FBI on March 5 of this year and is currently staying with family in Rockville, Maryland, under a home detention arrangement. She is scheduled to be sentenced on January 10th.
D.C. Superior Court Judge Danya A. Dayson said her decision to dismiss the lawsuit against seven of the eight former directors was based on her interpretation of D.C. law. She said that under the law, members of an organization’s board of directors can only be held liable if they cause damage to an organization like Casa Ruby if they “intentionally and not negligently caused damage to Casa Ruby.” He said he believed it was limited.
The judge said he did not dismiss the case against one of the board members because the lawsuit showed evidence that the board member had received some financial benefit from Corrado.
In a legal brief filed with the appellate court, lawyers for the Alston Foundation say Casa Ruby’s board members were “deliberately indifferent to the alleged misconduct of the nonprofit’s executive director or ‘knowingly… The evidence shows that they were ‘blind’, which corresponds to their actual knowledge. Inaction can harm a nonprofit and ultimately force it to become financially unable to continue operating. ”
Former directors have declined requests for comment on the lawsuit.
Harrison, the attorney representing the Alston Foundation in its bankruptcy filing, said those who owe money from Casa Ruby must give it until Jan. 21 to be eligible for compensation if funds become available. He said he must file a “proof of claim” form with the bankruptcy court. .
At the time of Casa Ruby’s closure, employees of the organization were among those who said they had not been paid in the months or weeks before the closure.
When asked why the Alston Foundation filed a bankruptcy petition on Casa Ruby’s behalf, Harris said, “Filing a bankruptcy petition allows a trustee with the appropriate expertise to resolve any remaining issues while at the same time ensuring that Wanda “This will allow the Alston Foundation to continue to focus on its business.” core mission. ”
According to U.S. Bankruptcy Court records, one of the employees responsible for gathering evidence on these unpaid claim forms was Mark E. Albert, who was appointed by the court as the bankruptcy filing’s trustee. He can be reached at 202-728-3020, according to court records.
Source: Washington Blade: LGBTQ News, Politics, LGBTQ Rights, Gay News – www.washingtonblade.com
