Meadville Tribune

Local News

October 29, 2013

Attorney General petitions court to oust Trustees of Conneaut Lake Park

Petition says current Trustees breached fiduciary duty

MEADVILLE — “It’s a new beginning for Conneaut Lake Park,” Greg Sutterlin said Tuesday of the Pennsylvania Office of Attorney General’s probe into operations at Conneaut Lake Park. “We’re elated it’s happened. Conneaut Lake Park has a chance at survival.”

Pennsylvania Attorney General Kathleen G. Kane has petitioned Crawford County Court of Common Pleas to oust the current Trustees of Conneaut Lake Park for what the Attorney General’s Office is calling the current board’s breaches of fiduciary duty in taking care of the park, causing the amusement park to suffer direct damage.

Sutterlin, and Steve and Joyce Popovich are the principals in Park Restoration LLC, a company that leases the Hotel Conneaut and Beach Club complex from Trustees of Conneaut Lake Park, the corporation that oversees the public trust that owns the amusement park. The original Trustees of Conneaut Lake Park are volunteers who were appointed by Crawford County Court of Common Pleas. The Trustees then select candidates whenever there are openings.

According to the court petition, the damage inflicted on Conneaut Lake Park include failing to insure against the structural loss due to the fire at the Dreamland Ballroom on Feb. 1, 2008, and the fire at The Beach Club on Aug. 1 this year; and failing to exploit opportunities and/or promote the best interests of the park.

The Pennsylvania Office of Attorney General wants county court to compel the Trustees to show why the court should not:

Permanently remove all current Trustees and directors of Trustees;

Appoint a new board to govern the affairs of Trustees going forward; and

Order any other relief which the court deems appropriate.

Sutterlin said he and the Popoviches were pleased with the new developments.

“We cannot describe the joy to our business and the Conneaut Lake area,” Sutterlin said. “We’re glad the attorney general has stepped up with an investigation.”

Trustees of Conneaut Lake Park had little comment on the situation when contacted Tuesday by the Tribune. Brian Pulito, attorney and spokesperson for Trustees of Conneaut Lake Park, offered only a brief emailed statement on the situation.

“At this time, I do not have authority to comment other than I have attempted to contact the AG’s office on several occasions to discuss this matter,” Pulito wrote.

Juanita Hampton, executive director of the Crawford County Convention and Visitors Bureau, said the Trustees’ role is to protect the park since it’s held in a public trust, but she understands Kane’s call for a switch in leadership.

“In order to make change happen, change has to happen,” Hampton said Tuesday afternoon.

Hampton was a Crawford County Court-appointed member of the Trustees of Conneaut Lake Park from June 2007 to June 2012.

Hampton said she resigned from the volunteer Trustees’ post due to her job with the tourist bureau as well as being named chairman of the Pennsylvania Association of Travel and Tourism’s professional development committee.

“It’s a full-time job. Trustees gave it their all,” Hampton said. “I commend them. They did the best they could.”

Leonard Adams of Adams Amusements, the ride operator for Conneaut Lake Park, said he had no knowledge of Kane’s petition request to remove the board until contacted by reporters.

“If they do it, I think it will hurt the park over helping the park,” Adams said. “The Trustees have done a lot with the resources they have available. I have a good working relationship with the Trustees. I’d be sorry to see them go.”

In the filing of the petition to remove Trustees of Conneaut Lake Park, Senior Deputy Attorney General Gene Herne alleges, among other things, that:

The board failed to take advantage of business opportunities that would have generated more revenue;

That Trustees steered business away from Hotel Conneaut;

And that these incidents and failure to insure Dreamland Ballroom and The Beach Club represent “serious breaches of their (Trustees) fiduciary duty.”

In filing the petition with Crawford County Court it appears Herne had no more success than the Tribune finding out who are the current Trustees. He names only Jack Moyers and Carol West as Trustees. He lists the rest as “John Does” whose names must be determined through discovery.

Herne asks the court to make the Trustees file a “full and complete account of their administration” of the park from June 29, 2007, to the present time due to Herne’s concern “that the Trustees have committed other financial irregularities” since that date.

“Hopefully, they will produce the information,” Francis Weiderspahn Jr., chairman of Crawford County Board of Commissioners, said Tuesday of the Trustees of Conneaut Lake Park. “Maybe there will be some answers. Hopefully, there is no wrongdoing, but it is time for the public to have more information than they have been getting.”

If Kane’s petition to remove Trustees of Conneaut Lake Park is approved in the Crawford County Court of Common Pleas, current and former members of the Trustees may be compelled to pay a “surcharge” of nearly $1 million.

Herne points out in the petition that Pennsylvania law allows such a surcharge in cases of a “breach of trust,” in this case that the Trustees failed to protect the park’s assets and manage its finances properly.

Herne quotes from the law that if a breach of trust is determined by the court, Trustees can be made to pay money or restore property.

In this case, Herne wants Trustees to pay for:

The value of the fire insurance policy on The Beach Club of approximately $611,000;

The cost of rebuilding the Dreamland Ballroom;

The value of lost opportunities to increase the park’s revenue; and

The cost of the state’s investigation of the park and attorney’s fees.

No hearing date on the petition request has been set as yet by Crawford County Court of Common Pleas.

 

Pat Bywater the Tribune’s executive editor contributed to this story. Keith Gushard can be reached at 724-6370 or by email at kgushard@meadvilletribune.com.

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