Meadville Tribune

Local News

November 19, 2013

Trustees in court today over attorney general's park petition

MEADVILLE — The future of Conneaut Lake Park may depend on the outcome of a hearing today on the Pennsylvania Office of Attorney General’s petition to oust the current Trustees of Conneaut Lake Park for allegedly failing to properly care for the amusement park.

Meanwhile, a statement from Trustees of Conneaut Lake Park issued late Monday afternoon said the Trustees were “saddened with the filing of the lawsuit by the attorney general, especially given our repeated, but failed, efforts to reach out to (her) office.”

A hearing on the attorney general’s petition is scheduled for 9 a.m. in Crawford County Court of Common Pleas before President Judge Anthony J. Vardaro.

Last month, the Pennsylvania Office of Attorney General petitioned the court for alleged breaches of fiduciary duty by the current Trustees, causing the amusement park to suffer direct damage.

Trustees of Conneaut Lake Park is the corporation that oversees the public trust that owns the amusement park.

According to the court petition, the damage inflicted on Conneaut Lake Park includes 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.

Trustees spoke out against the petition publicly for the first time Monday with the statement issued by Jack Moyers, head of Trustees of Conneaut Lake Park.

Moyers wrote that the Trustees strive to preserve and maintain the amusement park for its historical, cultural, social, recreational and civic purposes as the Trustees by-laws state.

“While not every decision that has been made has been supported by all, each was made with those purposes in mind,” Moyers wrote. “To allude that our actions did not strive to preserve and protect the historical asset of Conneaut Lake Park are unfounded and hurtful. This board has dedicated its heart, mind and spirit to the endeavors set forth in the purpose statement of this beloved park.”

The attorney general’s petition 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.

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.”

The petition also 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.

If the 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.

Keith Gushard can be reached at 724-6370 or by email at kgushard@meadvilletribune.com.

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