A D.C. Superior Court judge on Thursday, Aug. 11, approved a request by the Office of the D.C. Attorney General to place D.C.’s LGBTQ community services center Casa Ruby under temporary receivership to stabilize its finances and determine whether it can resume operating after it shut down its programs last month.
Among those who spoke at the virtual hearing was Casa Ruby founder and former executive director Ruby Corado, who said she did not oppose a limited receivership order. Corado spoke through an audio connection rather than appearing on video as did the judge and representatives of the Attorney General’s Office.
Also appearing on video for the hearing were representatives of two LGBTQ organizations that the AG’s office has named as candidates to become the Casa Ruby receiver – the D.C.-based Wanda Alston Foundation and the Baltimore-based Safe Haven, which has announced plans to open a facility in D.C.
In response to a request by Adam Gitlin, chief of the AG office’s Public Integrity Section, Judge Danya A. Dayson agreed to give the AG’s office one more day to decide which of the two groups would be named as the Casa Ruby receiver. After listening to testimony by June Crenshaw, the Alston Foundation executive director, and Iya Dammons, Safe Haven’s founder and executive director, Dayson said either of the two groups would be acceptable to her as the receiver.
The judge directed the AG’s office to submit a proposed order naming the receiver by the end of the business day on Friday, Aug. 12.
Dayson’s ruling approving a receivership for Casa Ruby came eight days after she approved a separate request by the D.C. AG’s office calling for a temporary restraining order to freeze all bank accounts and PayPal accounts held by Casa Ruby.
The call for both the restraining order and the receivership were introduced in court by the AG’s office on Aug. 1 in an emergency motion asserting that both Casa Ruby and Corado had violated the city’s Nonprofit Corporations Act in connection with their financial dealings.
“Casa Ruby’s operations suggest clear patterns of gross mismanagement and poor oversight of its programs and finances,” D.C. Attorney General Karl Racine said in a statement at the time the motion was filed in court. “Instead of fulfilling its important mission of providing transitional housing and support to LGBTQ+ youth, Casa Ruby diverted hundreds of thousands of dollars of District grants and charitable donations from their intended purpose,” Racine said.
He was referring to allegations in the AG office’s civil court filing that Corado used funds from the D.C. Casa Ruby to open a Casa Ruby LGBTQ shelter in El Salvador without any documented authorization from the Casa Ruby board of directors, which the court filings say rarely met and failed to provide oversight over Corado or Casa Ruby.
During the Aug. 11 virtual court hearing, Corado disputed the allegations, saying among other things, that claims that she was not in communication with the Casa Ruby board was a “misconception.”
Corado did not say in her remarks at the virtual court hearing where she is currently residing. Members of the Casa Ruby staff have said Corado had been in Salvador for most of the time this year and in recent weeks the staff was unable to reach her to discuss Casa Ruby related business. Staff members also reported that they had not been paid for over a month and a financial crisis prevented them from continuing any of Casa Ruby’s remaining programs.
In her comments at the Aug. 11 hearing, Corado said the funding crisis was caused by D.C. government agencies that she said failed to reimburse Casa Ruby close to $150,000 in grant funds that she said the city was committed to pay for services that Casa Ruby had already performed.
But email correspondence between officials with the D.C. Department of Human Services, which has provided most of the Casa Ruby grant funding, and Casa Ruby officials other than Corado, indicates the funding was withheld because Casa Ruby failed to comply with various grant requirements, including not having a functioning board of directors. One or more of the employees released the correspondence to the media.
“I believe that when the facts, as someone stated earlier, stop being allegations and actually become facts that you, Your Honor, will have an opportunity to understand the ramification of the allegations,” Corado said during the hearing. “There are people, including myself, who have received death threats over things that are not true,” she told the judge.
Gitlin of the AG’s office, while not specifically responding to Corado’s allegations, said his office has met the legal requirement needed to have Casa Ruby placed under receivership.
“In short, we do have reason to believe that Casa Ruby currently continues to be out of compliance with the Nonprofit Corporations Act, continues to be unable to meet its obligations, and its assets are in serious question,” he told the judge. “And so, we believe the requirements for the receivership statute have been met.”
He said the two groups under consideration to become the receiver are “both nonprofits in good standing with experience doing many of the services that Casa Ruby performed.” He added, “Both have pledged that even if they are not appointed receiver, they are happy to help because they care about the community that needs to be served.”
He concluded by saying the AG’s office would like whichever group is chosen as the receiver to “first assess the assets and liabilities that are outstanding for Casa Ruby, figure out whether a board can be reconstituted, and assess otherwise whether there is a path forward for the organizations.” Gitlin said the other option that the receiver should consider is whether its recommendation should be for “an orderly wind down in the way a nonprofit normally would” to end its operations.
Judge Dayson ordered that whichever group is chosen to be the receiver, which she was to approve the following day on Aug. 12, will be required to submit a report to the court on Sept. 13, 2022, on the status of its work. She scheduled a status hearing on the case for Sept. 29 at which time she directed Corado to arrange to have an attorney representing her.