In a little-noticed development, the Wanda Alston Foundation, which assumed control over the operations of the D.C. LGBTQ community services group Casa Ruby in August 2022 under a court-appointed receivership role, filed a petition on Aug. 27 of this year to place Casa Ruby in bankruptcy.
The petition, filed in the U.S. Bankruptcy Court for the District of Columbia, says Casa Ruby has estimated liabilities to at least 50 creditors of more than $1 million and estimated assets of 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 has no known financial assets, including cash.
He said the bankruptcy petition’s estimated assets of up to $50,000 are based on a pending lawsuit that the Alston Foundation filed against eight former Casa Ruby board members and Casa Ruby’s founder and former executive director Ruby Corado in December 2022. The lawsuit accuses the board of violating D.C.’s nonprofit corporation law by failing to exercise oversight over Casa Ruby’s operations that led to its financial collapse and shutdown in 2022.
The lawsuit calls on the court to require Corado and the former board members to pay “restitution, compensatory damages, punitive damages, receivership fees and expenses, court costs, attorneys’ fees, and expenses, and any other relief the court deems necessary and proper.”
A D.C. Superior Court judge on May 1, 2023, dismissed the lawsuit filed by the Alston Foundation against all but one of the former Casa Ruby board members but did not dismiss the case against Corado.
The Alston Foundation has appealed the ruling dismissing the lawsuit, and the case is now pending before the D.C. Court of Appeals.
The lawsuit also alleges that the board failed to adequately oversee the actions of Corado, who pleaded guilty in July of this year to a charge of wire fraud as part of a plea bargain deal offered by prosecutors.
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