In a little-noticed improvement, the Wanda Alston Basis, which assumed management over the operations of the D.C. LGBTQ neighborhood companies group Casa Ruby in August 2022 beneath a court-appointed receivership function, filed a petition on Aug. 27 of this yr to put Casa Ruby in chapter.
The petition, filed within the U.S. Chapter Court docket for the District of Columbia, says Casa Ruby has estimated liabilities to no less than 50 collectors of greater than $1 million and estimated belongings of between $0 and $50,000.
Nick Harrison, an legal professional representing the Wanda Alston Basis, which gives housing companies to homeless LGBTQ youth, stated Casa Ruby presently has no recognized monetary belongings, together with money.
He stated the chapter petition’s estimated belongings of as much as $50,000 are based mostly on a pending lawsuit that the Alston Basis filed towards eight former Casa Ruby board members and Casa Ruby’s founder and former govt director Ruby Corado in December 2022. The lawsuit accuses the board of violating D.C.’s nonprofit company regulation by failing to train oversight over Casa Ruby’s operations that led to its monetary collapse and shutdown in 2022.
The lawsuit calls on the court docket to require Corado and the previous board members to pay “restitution, compensatory damages, punitive damages, receivership charges and bills, court docket prices, attorneys’ charges, and bills, and some other aid the court docket deems essential and correct.”
A D.C. Superior Court docket choose on Might 1, 2023, dismissed the lawsuit filed by the Alston Basis towards all however one of many former Casa Ruby board members however didn’t dismiss the case towards Corado.
The Alston Basis has appealed the ruling dismissing the lawsuit, and the case is now pending earlier than the D.C. Court docket of Appeals.
The lawsuit additionally alleges that the board did not adequately oversee the actions of Corado, who pleaded responsible in July of this yr to a cost of wire fraud as a part of a plea discount deal provided by prosecutors.
The cost to which Corado pleaded responsible within the U.S. District Court docket for D.C. says she allegedly diverted no less than $150,000 “in taxpayer-backed emergency COVID aid funds” awarded to Casa Ruby to “personal offshore financial institution accounts for her private use,” in response to a press release launched by the U.S. Lawyer’s workplace.
Corado, who initially denied the allegations towards her, is presently staying with a member of the family in Rockville, Md., in a house detention association following her arrest by the FBI on March 5 of this yr. She is scheduled to be sentenced on Jan. 10.
D.C. Superior Court docket Choose Danya A. Dayson said that her resolution to dismiss the lawsuit towards seven of the eight former board members was based mostly on her interpretation of D.C. regulation. She stated she believes the regulation holds that members of a corporation’s board of administrators can solely be held chargeable for harming a corporation like Casa Ruby in the event that they “deliberately, somewhat than negligently, inflicted hurt on Casa Ruby.”
The choose stated she didn’t dismiss the case towards one of many board members as a result of the lawsuit presents proof that the board member acquired some monetary advantages from Corado.
In a authorized transient filed with the appeals court docket, the Alston Basis attorneys state that proof exhibits the Casa Ruby board members “had been intentionally detached or ‘willfully blind’ to the alleged wrongful conduct of the nonprofit’s govt director amounting to precise data on their half that inaction would hurt the nonprofit, finally and forcibly resulting in its monetary incapability to proceed operation.”
The previous board members have declined requests for touch upon the lawsuit.
Harrison, the legal professional representing the Alston Basis within the chapter submitting, stated anybody who’s owed cash by Casa Ruby has till Jan. 21 to file a “proof of declare” type with the chapter court docket to be eligible to be compensated if funds grow to be out there.
On the time of Casa Ruby’s shutdown, the group’s staff had been amongst those that stated they weren’t paid within the months or weeks previous to the shutdown.
Requested what prompted the Alston Basis to file the chapter petition on behalf of Casa Ruby, Harris stated, “Submitting the chapter petition ensures {that a} trustee with the suitable experience can wrap up the remaining points whereas permitting the Wanda Alston Basis to remain targeted on its core mission.”
U.S. Chapter Court docket information present that one of many officers in command of accumulating proof of declare types for these owed cash is Mark E. Albert, a court docket appointed Trustee for the chapter submitting. Court docket information present he might be reached at 202-728-3020.
