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A D.C. Superior Court judge on Thursday said she was not ready to issue a ruling on whether the LGBTQ community services center Casa Ruby should be dissolved as recommended two and a half weeks earlier by a court-appointed receiver that took control of Casa Ruby’s operations.
Judge Danya A. Dayson stated at a Sept. 29 court status hearing that the Office of the D.C. Attorney General, which filed civil charges against Casa Ruby and its founder and former executive director Ruby Corado in July, needed more time to complete its investigation into Casa Ruby’s operations.
“We think it may be premature to immediately commence proceedings for dissolution while our investigation is still pending,” Cara Spencer, an official with the Office of the Attorney General, told the judge. “We’re still gathering information. We still intend to shortly serve discovery so we can bring it to a resolution promptly,” she said.
The AG’s office filed a civil complaint against Casa Ruby and Corado on July 29 alleging that the LGBTQ group had violated the city’s Nonprofit Corporations Act for the past several years. The complaint says improper actions by Corado, including the unaccounted-for expenditure of funds and a failure by the Casa Ruby Board of Directors to provide oversight led to a financial crisis.
The complaint notes that Casa Ruby employees were not getting paid and over $1 million was owed to landlords in back rent for at least three buildings Casa Ruby used for its offices and to provide emergency housing for homeless LGBTQ youth.
With Corado spending most of the past year in El Salvador, according to Casa Ruby employees, the employees and managers struggling to keep its operations going said they were forced to shut down all operations in late July.
Corado, who attended the Sept. 29 status hearing through a phone hookup, said she had yet to retain a lawyer due to a “shortage of funds.” She told Dayson she expects to finally retain an attorney but said she had not received a copy of the receiver’s report that recommended Casa Ruby be dissolved. One of the attorneys with the AG’s office told Dayson the office sent a copy of the report to four email addresses it had for Corado and Casa Ruby.
At the judge’s request, one of the AG office officials sent another copy of the report to Corado during the hearing to an email address that the judge asked Corado to provide.
Dayson on Aug. 12, at the recommendation of the AG’s office, appointed the Wanda Alston Foundation, a D.C. organization that provides housing for homeless LGBTQ youth, as the Casa Ruby receiver. One day earlier, Dayson approved the AG office’s request that Casa Ruby be placed under receivership.
On Aug. 3, also at the request of the AG’s office, the judge issued an order that all of Casa Ruby’s bank accounts and financial assets, which had been under the sole control of Corado, be frozen. Dayson lifted that freeze after the Alston Foundation assumed control of Casa Ruby under the receivership.
As she had at the Aug. 11 court hearing, Corado stated in the Sept. 29 hearing that Casa Ruby’s financial problems were caused by the D.C. government withholding as much as $600,000 in grant funds for services Casa Ruby had provided.
Officials with the D.C. Department of Human Services, which initially approved the grants, have said some of the grant funds were withdrawn or cancelled because Casa Ruby failed to comply with the terms of the grants. In some cases, the officials said, required financial reports were not filed to substantiate how the funds were spent.
Corado also asked Dayson at the Sept. 29 hearing to order the receiver and officials with the AG’s office stop releasing “one-sided” information that she said was falsely placing her and Casa Ruby in a negative light through reports in the press.
“The story that has been painted is that Casa Ruby left the clients in the cold,” Corado said. “That is not accurate.”
When asked by Dayson what she wanted the court to do, Corado said, among other things, she did not want the receiver to be allowed to disclose information about what happened in the court proceedings that Corado said was being reported by the press inaccurately.
She said highly negative publicity resulting from the release of information from the previous court hearing resulted in her receiving death threats and damage to the engine of her vehicle in an act of vandalism that cost $1,700 to repair.
Dayson said Corado appeared to be seeking a gag order to prohibit the receiver or the AG’s office from discussing or releasing information that was part of the public record. Saying there were insufficient grounds for such an order, Dayson announced she was denying a request to seal court records or issue a gag order against the receiver.
The judge ruled in favor of a request by the AG office attorney to file an amended complaint for the case, directing them to file the amended complaint by Nov. 28. Court records show that Dayson directed the parties to return to court for scheduling hearings on Oct. 28 and Jan. 6.