Two weeks after Pat Ferns gave up his executive director's chair, the Banff Television Foundation has made another startling announcement: The venerable arts institution is filing for bankruptcy protection.

The foundation's communications manager, Sarah Pearson, confirmed that the 33-person operation, cash-strapped and burdened with debt, sought protection yesterday from its creditors in a Calgary court. The organization mounts cultural events such as the 25-year-old Banff Television Festival.

Pearson said she did not know the size of the foundation's deficit, but according to court documents quoted in trade publication Playback, the foundation has an "extremely serious" financial crisis.

The publication added that the money woes could sink the landmark festival, slated to be held June 13-17 in Banff, Alta. Yesterday, Pearson said the festival will go on. "That is the plan," she added.

Playback said if court protection is approved by Madame Justice Horner, the Calgary insolvency accounting firm of Richter, Allan & Taylor Inc. will become the foundation's trustee and pursue a deal with Toronto-based Achilles Partners LLC to keep Banff afloat.

Playback blamed SARS, a case of mad-cow disease and the Iraq war for a decline in festival attendance.

"New events launched last year in hope of boosting the Banff brand only increased its deficit," the publication was quoted as saying.

Playback added that early negotiations with Achilles also stalled, but the firm recently "expressed interest" in a purchase or joint venture with Banff. But only if Banff filed for protection.

Yesterday, a source close to the foundation scoffed at suggestions that war or infectious disease had much to do with the foundation's current conundrum. She said the organization's financial troubles have been brewing for some time, adding that the board was shocked to discover several years ago that a so-called rainy-day fund had to be used to pay for some newly discovered debt. After this reserve fund was depleted, the source added, the foundation struggled to get control of its finances, hiring, firing and losing a string of accountants.

When Ferns's job change was announced at the beginning of this month, the foundation said he was stepping down as president and CEO of the foundation to assume a "more creative role" in the organization. Ferns joined the foundation in 1995.

Yesterday, Pearson confirmed that Ferns will continue to have a role in the foundation. "He's still with us right now," she said. "His role for the future will be determined but he'll definitely play some sort of role in the festival."

Asked what caused the foundation's downfall, Pearson said she "did not want to comment on that at this time."