More claims added in Woodstock Foundation lawsuit

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by Mike Donoghue, Vermont News First, Vermont Business Magazine The former chair and vice chair of the Woodstock Foundation want to add legal claims of unjust enrichment and a breach of fiduciary duty to their lawsuit against former trustees after learning one of the defendants was paid almost $1.5 million in recent years without full board approval, new court records maintain.

Defendant Trustee John T. Hallowell received at least $1,472,951 pay from the Foundation plus substantial other benefits, including free luxury housing between 2018 and 2022, according to papers filed in Vermont Superior Court in Woodstock last week.

Ellen R.C. Pomeroy, the former Foundation chair, and Salvatore Iannuzzi, the former vice chair, also want the defendant trustees to stop using Foundation funds to pay for their legal fees while fighting the current lawsuit.

In addition, Pomeroy and Iannuzzi seek to have the defendants reimburse the Foundation for all legal fees paid on behalf of the individual trustees thus far.

“Mr. Hallowell was unjustly enriched as a result of being a Trustee of the Woodstock Foundation and a Director of the WRC Holdings LLC because many of these amounts were not authorized by resolutions…and in some instances the amounts of payments were not adequately disclosed to the Boards,” according to the new filing.

While Hallowell was collecting nearly $1.5 million, documents filed by the Foundation with the Internal Revenue Service indicated he was paid “zero,” records show.

“The defendants made the same representation to this Court,” the filing said.

 They also are asking the court to compel the defendants to provide pre-trial papers and evidence, known in the legal world as discovery.

Judge H. Dickson Corbett had told the parties to be ready for a trial in September 2024 and that they should participate in the discovery exchange. Everything was going along smoothly for discovery with the plaintiffs granting a deadline extension to the defendants until May 18.

However, “the Defendants did a sudden about-face” on April 24, the motion said. The defense started to claim there was an undue burden and expense for the trustees and the Foundation.

“The Defendants alleged they should not have to respond to discovery until such time as they retain unspecified purported experts who will supposedly conduct an investigation,” it said.

“Defendants have failed to discuss, however, that this proposed investigation would be a ‘do-over’ of a prior investigation,” they said.

The plaintiffs said they had noted earlier the first investigation by a law firm hired by the defendants last year had confirmed many of the concerns and observations by Pomeroy and Iannuzzi. 

Foundation Directors James S. Sligar, the current chair, David M. Simmons, Michael D. Nolan, John T. Hallowell, Douglas R. Horne, William S. Moody, Gail Waddell and Angela K. Ardolic were named as defendants when the case was filed by Pomeroy and Iannuzzi in January 2023.

Their defense lawyers have filed written denials to the initial claims.

A New York City communications company, hired by the Foundation to handle public relations for the lawsuit, said this week the trustees believe the latest claims are without merit and will fight them.

“We will continue to vigorously defend these false claims just as we’ve done since this frivolous lawsuit began more than a year ago,” said Vincent Novicki, a vice president of Risa Heller Communications. 

Multiple attempts to reach Hallowell, including through Novicki, for comment on the new court claims about him were unsuccessful. Hallowell did not respond to phone and text messages from the Vermont Standard. 

A court hearing is planned for May 28 to consider efforts by the defendants — the current Woodstock Foundation leaders — to try to delay for at least six months the lawsuit brought by Pomeroy and Iannuzzi over allegations of mismanagement and malfeasance at the Woodstock Inn & Resort and the Billings Farm & Museum.

Pomeroy and Iannuzzi maintain the defendants’ motion filed in January seeking a six-month delay is just a thinly veiled stalling tactic to avoid the main legal issues.

​The trustees would normally have until May 22 to file a written answer in court to the latest motion submitted by Pomeroy and Iannuzzi, but the defendants have asked for an additional two weeks until June 5 — pushing their response out past the court hearing.

No ruling has been made on the two-week delay request.

Judge Corbett had initially agreed to set aside one hour on May 28 for the hearing to consider several pending motions in the lawsuit, which was initially filed in January 2023. It included the motion by the defendants for a stay in the proceedings for a half year. It was unclear with the new motions if the hearing might go longer.

Burlington lawyer Christopher D. Roy of Downs Rachlin Martin is defending the individual directors, but did not respond about the latest filings about his clients.

The 9 a.m. court hearing on May 28, which will be conducted on video by WebEx, will mark the first time the judge and the various lawyers in the case will come together to try to resolve the dispute. At least four defense motions to try to dismiss various claims in the lawsuit were rejected by Judge Samuel Hoar Jr. last August based on filings. 

Hanley has said his clients will fight any delaying tactic.

The ongoing legal battle has generated considerable interest because the Foundation and Holdings play a major role in the economic engine for the Woodstock region. About 600 people are employed through the operation of the Woodstock Inn & Resort, the Woodstock Country Club and the Saskadena Six Ski Area (formerly Suicide Six), along with the Billings Farm & Museum. 

A version of this story first appeared in The Standard.

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