Court hears Saskatoon's Lighthouse cannot meet next payroll

The lawyer for amajor creditor forLighthouse Supported Living offered a glimpse Thursday into the perilous state of the Saskatoon facility's finances.

A Court of King's Bench judge is hearing an application fromboard members Twila Reddekopp and Jerome Hepfner to appoint an interim receiver to look into what's happening with the organization's money.

Wayne Pederson appeared at the hearing by phone to speak for Affinity Credit Union, to which the Lighthouse owes $2.3 million. The organization also has a line of credit with Affinity.

According to Pederson, the Lighthouse now has $43,000 left on its line of credit not enough to meet its next payroll.

Pederson suggested that "assets will have to be sold to resolve debts."

• Lighthouse board members seek interim receiver to steer financially troubled organization

Justice Allison Rothery had intended to hear arguments Thursday on whether to appoint a receiver. Instead, she adjourned the matter to Feb. 21 because the three other Lighthouse board members hired a lawyer to represent them at the hearing initiated by Hepfner and Reddekopp.

That lawyer requested a brief adjournment to review the affidavit material that accompanied the application.

Rotherygranted the adjournment.

Rothery also questioned Candice Grant, the lawyer for Reddekopp and Hepfner, about what she expected an interim receiver to find. The receiver would have 30 days to wade into the Lighthouse finances.

Grant said the receiver would be limited in time and scope, operating with an eye to finding out what's happening with the finances. She said the receiver may well find "further issues that they would be unable to resolve within 30 days.

"It could lead to full receivership."

In her affidavit, Reddekopp described an organization plagued by financial mismanagement and on the cusp of massive layoffs and insolvency.

In granting the adjournment, Rothery issued a "preservation order" that prevents any substantive changes at the Lighthouse without approval by four of the five board members before Feb. 21.

Specifically, no assets may be sold, there will be no layoffs and no destruction of any records.