A WRANGLE over whether leaseholders were properly consulted over repairs could leave the council's housing management company facing bankruptcy, it has been claimed.

Leaseholders, who had purchased properties under the Right to Buy scheme, were shocked when Ascham Homes billed them for thousands of pounds with little notice after the organisation carried out work on blocks of flats they shared with council tenants.

Ascham Homes is seeking to overturn rulings by both the Lands Tribunal and Leasehold Valuation Tribunal, which refused to grant the organisation retrospective exemption from the need to consult leaseholders.

The housing company wrote to the Lands Tribunal President explaining he had mistunderstood important elements of the case and invited him to an oral hearing which will take place on Thursday, September 3.

The president will then decide if Ascham Homes will be granted permission to appeal.

An application for judicial review was filed by Ascham Homes on Monday, July 6.

But the housing company was granted extra time by the court to produce documents relevant to the application.

At a board meeting an unnamed board member expressed his disatisfaction with the company's ongoing legal challenge, according to minutes which have just been made public.

He described the situation as 'damning' and said he was being told that further legal action could leave Ascham Homes facing bankruptcy and that this could have 'implications' for the council.

If the ALMO was to go bankrupt, the taxpayer would be left to pay for the £3.8m deficit in the pension fund.

The board member demanded a directors-only meeting to establish who is responsible for the 'mess', what action should be taken and what should happen to those responsible.

Another board member said that 'pointing fingers is not the way forward' and added that the council will be carrying out an investigation.

Other board members pointed out that the council plans to set aside additional cash to plug any funding gaps caused by legal costs.

A meeting was held on Tuesday, May 5, to discuss whether Ascham Homes can bill leaseholders for repairs.

The financial implications could affect thousands of council tenants across Waltham Forest.

The Decent Homes Programme, which aims to bring all council housing up to a basic standard by 2011, is already struggling.

This could leave thousands of council tenants living in properties which do not meet a basic standard of decency, as defined by the government.

Michael McGough, 60, a leaseholder, recieved an unexpected £30,000 bill for repairs to his roof and stairs to his property in West Avenue, Walthamstow.

He said: "They have used taxpayers money willy- nilly to protect their own jobs, which are under threat because of their own incompetence."

An Ascham Homes spokeswoman said: "Financial provision has been made by Ascham Homes to fund all contemplated legal action; there is no issue of bankruptcy.

"There has been no change since the meeting and no bills are currently being sent to leaseholders. The council has not launched an investigation."