Meadville Tribune

Local News

November 19, 2013

Park probe under way: Judge orders Trustees to hand over financial documents

MEADVILLE — Trustees of Conneaut Lake Park will turn over copies of all financial records it has for the amusement park to the Pennsylvania Office of Attorney General.

Crawford County Court of Common Pleas President Judge Anthony J. Vardaro issued an order Tuesday morning following a brief status conference hearing between attorneys for the park and the attorney general’s office that drew a crowd of about 60 into the court gallery.

Last month, the Pennsylvania Office of Attorney General Kathleen Kane petitioned county court to oust the current Trustees of Conneaut Lake Park for allegedly failing to properly care for the amusement park.

In his order, Vardaro said copies of all Trustees’ financial records dating back to June 29, 2007, are to be turned over to the attorney general’s office within the next 30 days. The June 29, 2007, date is when a county court-appointed board of trustees was put in place by Vardaro.

Trustees of Conneaut Lake Park is 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 Vardaro. The Trustees then select candidates whenever there are openings.

“We’re willing to comply with whatever you request,” Jack Moyers, chairman of Trustees, told Vardaro and Gene Herne, the senior deputy attorney general, assigned to the case.

Herne said profit and loss statements for the park for the past two years had been turned over previously by Trustees as well as board meetings minutes dating back to 2007, though three or four months were missing. A copy of the list of Trustees was turned over to Herne on Tuesday by Brian Pulito, the Trustees’ attorney.

In addition to ordering Trustees to turn over copies of all financial records to the attorney general, Vardaro ordered all meeting minutes and copies of insurance policies not already provided to the AG’s office by Trustees be turned over as well.

In issuing the order, Vardaro did not order a forensic accounting of the park’s financial records at this point. The order does allow for the attorney general to review the records to narrow down any potential issues it wishes to pursue.

Another status conference will be scheduled in county court within 60 days.

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, 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.”

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.

Following the approximate 20-minute hearing, Moyers said Tuesday’s hearing went as he expected and Trustees will fully comply with Vardaro’s order.

“We believe we’ve done the best we could do with the circumstances that were dealt to us and the day-to-day operational circumstances we face,” Moyers said of park operations.

Greg Sutterlin, one of the principals in Park Restoration LLC, which operates the Hotel Conneaut and Beach Club nightclub under a lease agreement with the Trustees, was pleased with Tuesday’s events. Park Restoration, which has been operating and restoring the two properties for more than four years, has called for the ouster of the current Trustees.

“It’s a good start. Sixty days from now, hopefully we’ll accelerate the process,” Sutterlin said. “It’s what we expected. We were hoping the Trustees would have resigned today and did the right thing instead of taking down the park further with this nonsense.”

Steve Popovich, another principal in Park Restoration, wished some type action would have happened sooner either by Vardaro or the county commissioners.

“They let it go too long,” Popovich said.

In May, the Crawford County Board of Commissioners said it will put into motion plans to have Conneaut Lake Park sold for overdue property taxes. The park owes more than $850,000 in overdue property taxes interest and penalties to Crawford County, Summit and Sadsbury townships and Conneaut School District.

However, any proposed tax sale won’t happen until at least the September 2014 tax upset sale due to the number of properties and complexities in property title searches that would be involved with the park.

H. LeRoy Stearns, a former court-appointed overseer of Conneaut Lake Park operations before the Trustees were designated, said he was concerned about the responsibility of the Trustees to protect the trust’s assets — which are the buildings and property.

“That would be the only thing I’d be looking at — the responsibility of the trust,” Stearns said.

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