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The executive director of Transgender Health Empowerment told a U.S. Bankruptcy Court proceeding on Aug. 8 that the financially struggling group was no longer carrying out its core mission of providing services and advocacy for the D.C. area transgender community.

Anthony Hall said the group, which filed for Chapter 11 bankruptcy on July 7, was devoting all of its limited resources to operating a temporary housing facility for crime victims under a non-LGBT related city grant. Hall and T.H.E. attorney Richard L. Gilman said the crime victims’ grant currently was the group’s only source of income.

Earlier this year, the D.C. Department of Health abruptly discontinued its grants for T.H.E. that funded transgender and LGBT-related programs since 2004. Mayor Vincent Gray said the city terminated the grants after learning that the IRS placed liens on the organization for its failure to pay more than $260,000 in employee withholding taxes over a period of at least three years.

The bankruptcy filing shows that T.H.E. also owes close to $50,000 in unpaid employee withholding and unemployment insurance taxes to D.C. and Maryland. Its total combined debt comes to more than $560,000, the bankruptcy filing shows.

Hall and Gilman answered questions about the organization’s finances and its plan to restructure and pay off its debt from two representatives of the bankruptcy court’s trustees in a proceeding known as a 341 Hearing. The hearing is named for a section of the bankruptcy code that allows both the trustee and creditors to question the person or organization in bankruptcy.

More than a dozen former T.H.E. employees attended the hearing.

In response to questions by veteran transgender advocate Earline Budd, one of the founders and longtime employee of T.H.E., Hall said it’s his strong desire to pay close to two dozen former and current T.H.E. employees’ wages that were unpaid for as long as two months. The bankruptcy filing shows Budd is owned $4,615 in back wages and most of the other employees are owed between $2,000 and $3,000 in back wages.

Hall and Gilman told Budd T.H.E.’s ability to resume its transgender and LGBT related programs would depend on whether the city agrees to reissue the grants it discontinued in April and May due to the IRS liens.

“It’s just heartbreaking to see this happening,” Budd told the Blade after the hearing. She said she is taking steps to help create a new organization to fill what she said was a vacuum in trans related services and advocacy brought about by T.H.E.’s financial collapse.

Hall and members of T.H.E.’s board have declined the Blade’s requests for comment.