Lighthouse board members seek interim receiver to steer financially troubled organization
Dan Zakreski | CBC News | Posted: February 13, 2023 8:33 PM | Last Updated: February 14, 2023
Affadavit by Twila Reddekopp alleges mass layoffs and insolvency looming
A recent court filing by a board member at the Lighthouse suggests the Saskatoon supported living facility is on the cusp of mass layoffs and insolvency — and calls for an interim receiver to take over its operations.
This assessment is contained in an affidavit by Twila Reddekopp who, along with Jerome Hepfner, served on the Lighthouse board as interim co-managing directors until their removal last month, according to documents filed at Court of King's Bench in Saskatoon.
The board's current executive director, Don Windels, did not return calls for comment.
Reddekopp and Hepfner are asking the court to appoint a third party to run the operation. That matter will be at Court of King's Bench this week.
"The Lighthouse is now experiencing some financial/cashflow issues and the board cannot come to any decisions on how to address these," Reddekopp wrote in her affadavit.
"It is for this reason that I am of the view that the appointment of a third party receiver-manager, who can make decisions in the best interests of the organization with objectivity and professional judgment, is absolutely necessary."
Reddekopp's affadavit purports to show what's been happening behind the scenes at the Lighthouse since a Court of King's Bench judge ordered an investigation into its operations, including details on the removal and return of Don Windels as executive director.
That report by Justice David Gerecke ordered that then-executive director Don Windels be removed because of questionable financial dealings. The report was subject to a six-month publication ban that was lifted in the summer of 2022.
It revealed that Windels asked the Lighthouse for a loan in 2017 so he could buy a house for his recently divorced daughter. Instead, the Lighthouse itself bought the property for $60,000. The Lighthouse paid for insurance, utilities and property taxes.
The amount was not recorded as a loan. It went on the Lighthouse's books as a capital asset worth $60,000.
The judge found that, "Don Windels had sole and exclusive possession of the Walmer house for the entire time it was owned by the Lighthouse." The deal was approved by the Lighthouse board in a closed-door meeting.
In his Dec. 6, 2021, judgment, Justice Gerecke ordered that "effective immediately," Windels was to be removed from the board of directors for the Lighthouse and Blue Mountain, and as executive director of both organizations.
"Mr. Windels failed to at all times exercise his powers and discharge his duties honestly and in good faith with a view to the best interests of the corporation," Gerecke wrote.
Windels returns as decision appealed
Windels appealed the dismissal and the province's Court of Appeal heard the case in May 2022. It has not yet given a decision and, in the interim, "the appeal automatically stayed the operation of the Dec. 6, 2021 judgment," Reddekopp wrote.
"On Feb. 2, 2023, Mr. Windels attended at the Lighthouse ... and advised staff that he was the executive director," she wrote.
She said that the return of Windels created an irreparable rift in the board, as "essentially the board has broken down into two factions."
Reddekopp said the publicity around the Gerecke decision hurt the organization in the community, damaged its funding and its relationship with the government.
"On or about June 30, 2022, the Minister of Social Services, Gene Makowsky, announced on a radio talk show that the province intended to pull its programming from the Lighthouse," she wrote.
"The Ministry of Social Services proceeded to discontinue most of its funding in September 2022."
Following the money
Reddekopp said in the affidavit that she and Hepfner continued to examine the Lighthouse books after the organization's woes went public, and that more irregularities emerged, including the following:
- The Lighthouse had used a service called Telpay for payroll and other expenses. Reddekopp wrote that there had been no documentation kept for payments through Telpay, "so we have been having an extremely difficult time reconciling payments and actual expenses."
- Someone had withdrawn $91,299 since 2016 from a Lighthouse investment account, with no record left of where the money went.
- On Jan. 26, the Ministry of Social Services told the Lighthouse it was withholding $101,570 "because of the Lighthouse's inability to provide the required financial reporting to the ministry," Reddekopp wrote.
Reddekopp said that Lighthouse staff have reached out to her with concerns of pending layoffs.
"On or about Feb. 6, 2023, he [an unnamed staffer] received a notice of layoff of his employment which indicated that the Lighthouse was undertaking a group termination of 49 employees effective March 6, 2023," she wrote.
Reddekopp said she'd been in contact with Affinity Credit Union, to which the Lighthouse currently owes $2.3 million.
"Affinity has indicated that it believes the Lighthouse to be insolvent. It also has expressed significant concerns with the recent developments at the board level," she wrote.
"Affinity has advised that it will seek, in the near future, to appoint a receiver for the Lighthouse which will result in its liquidation."
Reddekopp's lawyer did not return calls for comment.