law

ProCAP petitions for receivership

PROVIDENCE Community Action announced Wednesday its board of directors had voted to petition for receivership.
Posted 12/13/11

(Updated, 12:45 p.m.)

PROVIDENCE – Providence Community Action – which provides human service programs aimed at improving the lives of low-to-moderate income individuals and families - announced Wednesday its board of directors had voted to petition for receivership.

“This course of action was voluntarily taken as a proactive measure to protect the long-term operational capacity of ProCAP. It should not be viewed as a step towards dissolving this organization but rather as a necessary step to preserve ProCAP as a critical community asset,” said Michael Solomon, chairman of ProCAP’s board of directors.

“The sad reality is ProCAP has been driven to the brink of insolvency by former members of management, and this measure is needed to return the organization to sound financial footing,” Soloman said.

According to WPRI.com, Providence Mayor Angel Taveras replaced three of ProCAP’s board members after an audit revealed “staggering mismanagement” of the agency’s finances. Its executive director Frank Corbishley was suspended without pay in November.

“From reading the independent audit report completed by Ken Richardson, it was apparent that significant mismanagement had occurred at ProCAP,” said Frank Shea, who replaced Corbishley as acting executive director.

“However, the depth and severity of the organization’s fiscal crisis did not become completely clear until we were able to get inside and begin our operational assessment in earnest,” Shea added.

The petition was brought to Superior Court Judge Michael A. Silverstein by the agency’s legal counsel, William O’Gara.

Taveras also announced Wednesday that the City of Providence has agreed to lend ProCAP $250,000 as an emergency revolving fund "to keep the agency's doors open," which Providence will recoup under the terms of the receivership.

"The people of Providence deserve much better. Receivership has become the only way for a fresh start at ProCAP," Taveras said in a news release.

Updated with comments from Taveras.

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