Blue Heron Financial has dumped its interim CEO Jay Richardson, along with other staff cuts.

The company reports that its board of directors has taken steps to preserve cash as part of its restructuring plan. These steps have included the laying off of certain of its staff, including Richardson. Richardson was appointed CEO back in November 2001.

In the interim, a subcommittee of the board will be struck to perform the office of the CEO until a permanent replacement is found.

Blue Heron says it has received and expects to receive advances for working capital purposes from One Hundred & Eighty Degree Capital Corp. The advances are secured against the assets of Blue Heron.

Merchant Capital Group Corp. has filed a statement of claim against, among others, Blue Heron and its directors in connection with the layoff of Richardson and the potential financing with 180 Capital.

The claim is for damages for breach of contract and economic torts in the amount of $4 million, and for orders reinstating Richardson as the interim CEO of Blue Heron and appointing certain representatives of Merchant to the board of Blue Heron. Management of Blue Heron feels the claim is without merit and intends to defend itself vigorously.

Merchant Capital has also requisitioned a meeting of the shareholders of Blue Heron for the purpose of electing a new slate of directors, proposed by Merchant Capital, and has provided Blue Heron with a notice for Blue Heron to convert $355,000 of the @rgentum Management and Research Corp. secured debt into common shares of Blue Heron. Both actions are currently being considered by Blue Heron’s management in consultation with Canadian Venture Exchange.