05/20/07 — Lighthouse close to settling last debts

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Lighthouse close to settling last debts

By Matthew Whittle
Published in News on May 20, 2007 2:07 AM

The Lighthouse of Wayne County closed its doors in December, but since then, the board of directors has been actively trying to settle the organization's remaining $50,000 in debt. Now, member and spokeswoman Cindy Sanford said, they hope they are getting close.

"We've written to our creditors asking if they could write off the debts, and we've had some good responses so far," she said. "They've been very understanding."

Of the nearly $25,000 owed to various entities, including the city of Goldsboro, Progress Energy, Time Warner Cable and Pittard, Perry and Crone, nearly a quarter has been forgiven.

The Lighthouse also owes between $20,000 and $25,000 in outstanding lines of credit with banks BB&T and Wachovia.

According to Mrs. Sanford, the agreement with BB&T was for a secure loan, borrowed against the organization's administration building on Walnut Street, which is currently in the foreclosure process. There was no such agreement with Wachovia.

That means Wachovia and the others will have to wait in line behind BB&T to collect on their debts.

Bankruptcy attorney Robert Fuller said once The Lighthouse liquidates all the assets it can -- including two empty lots beside the safehouse, because it is a 501(c)3 non-profit agency, there will be little recourse for those creditors unable to collect the money owed to them. Any assets The Lighthouse is unable to liquidate must be turned over to another non-profit organization.

Fuller explained that the only agency able to go after The Lighthouse at that point -- short of a lawsuit -- is the U.S. Internal Revenue Service.

"You can't get blood out of a turnip," he said.

And, Mrs. Sanford added, The Lighthouse has already paid its $70,000 debt to the IRS, save a $200 interest check that she hopes will go in the mail on Monday.

Other debts owed by The Lighthouse also are in the process of being settled.

Former co-director Cheryl Seronick, who gave the organization $40,000 to help it pay off its IRS debt, has agreed to make that a donation, Mrs. Sanford said.

The board also is working to finish paying its employees.

"We have paid the employees a flat $200 for the hours they worked before we closed down," Mrs. Sanford said.

For two or three employees, she added, that paid them in full. For the others, The Lighthouse still has about $2,000 in the bank, which the board plans to distribute on a pro-rated basis.

"We can still pay them something," Mrs. Sanford said.

But once those employees get their 2007 W-2s, it's likely The Lighthouse will cease to exist.

"January 2008, I'm hoping we can have everything finally closed out," she said.

Once they do, it will be the end of an organization that served Wayne County for 25 years, caring for victims of domestic violence.

"Closing The Lighthouse was done with much deliberation and prayer. It was not something done lightly," Mrs. Sanford said. "I've played it through in my head again and again, but I think when I got on the board (in late August 2006), I don't know that there was any way to salvage it.

"I just wish it hadn't gotten to the point that this was the only option."

And, she continued, for better or worse, there's not really anybody they can hold responsible for The Lighthouse's collapse -- it was just a collective failure.

"You can speculate, but I don't think it was just one person. It was just the circumstances snowballing," Mrs. Sanford said. "I think there should have been more vigilance. Some hard questions should have been asked all along. They just had a $200,000 operation running on $100,000. They were robbing Peter to pay Paul, and it just couldn't work any longer.

"The board members, the directors, the funders -- they all should have been more vigilant and questioning of the budget status. It was just a catch-22. Nobody wanted to be the bad guy."

Today, domestic violence victims are being referred to the Wayne Uplift Resource Center, which took over the domestic violence services previously offered by The Lighthouse, including court advocacy programs, support groups and classes in anger management, parenting, abuser treatment and domestic violence victim empowerment, as well as two 24-hour hotlines -- 736-1313 for English and 394-1621 for Spanish.

The safehouse, however, is still closed.

But, Wayne County Manager Lee Smith said he is hoping it can be re-opened by the beginning of July.

Currently, he explained, Wayne Uplift is awaiting word on several grant applications and once that funding is in place, the process of re-opening the shelter can begin.