Fractious rifts at Mobile Ballet are now public after a legal complaint against a majority of the board of directors was filed in Mobile County Circuit Court Jan. 27. A trio of current and past board members named 10 other board members and the director as defendants in the civil action.
The 52-page verified derivative lawsuit alleged breach of fiduciary duty and conspiracy to breach those duties, among other serious allegations. Twenty-five pages of documentary evidence accompany the suit.
“It’s not the purpose of this lawsuit for disgruntled people to vent their frustrations about what the majority has done. The nature of this lawsuit is to save Mobile Ballet as we have known it for 30 years. If this lawsuit fails, Mobile Ballet as we have known it will fail,” attorney Ray Thompson said.
The local arts realm was shocked when Winthrop Corey suddenly stepped down as Mobile Ballet’s artistic director just before its 2016 “Nutcracker” performance, ending his 30 years there.
“I believe he has been almost singlehandedly responsible for turning Mobile Ballet into the widely respected classical ballet organization it is today,” current board member Beverly Davis said. She was on the board when Corey arrived.
The lawsuit sketches the dysfunction it alleged led to Corey’s departure. The schism appears vast.
“We have a managing director right now who is costing us huge sums of money through her negligence, malfeasance, misfeasance and self-dealing. These are all specifically outlined in the lawsuit and backed by facts,” current board member Monty Thull said.
Plaintiffs are current board members Davis and Thull along with immediate past board member Rhea Mostellar. The only other current board members not named as defendants are Catherine Scott Ashbee, Marie Grip, Libby Lyon and Jean Tucker.
“Those of us who have opposed the current regime have done our level best to do what we can do. When you run out of options you have two choices: You can throw your hands up and walk away or you can say you’ll do the right thing,” Thull said about the decision for legal action. He has been a board member for six years.
The lawsuit is detailed. It opens by connecting directors and their various ties beyond Mobile Ballet. A pair of doctors, one being Board President Sandra Parker, M.D., are husband and wife. Others have business relations through medical and educational institutions and their related industries, including with Mobile Ballet Managing/Development Director Karen Kennedy.
The complaint alleges current issues began in 2012 when Becky Tate became board president and Kennedy was hired as a part-time development director. It’s claimed Tate unlawfully appointed Kennedy managing director in 2012, which was “kept secret” for more than a year. During an August 2013 board retreat, Kennedy was still introduced as development director with no mention of her new title.
“All I can say is to the best of my recollection, she was never officially named managing director by the board as a whole,” Davis said.
The suit says the board was subsequently packed with those linked to Kennedy, and Parker’s 2015 ascension to board president saw more of the same. Kennedy allegedly requested and received pay raises annually from 2012-16.
“There are such conflicts of interest among the majority board members that we cannot get 10 or 12 independent decisions from the people. They are all so co-opted and so beholden to Becky Tate, Sandra Parker and Karen Kennedy that basically they do what those three tell them to do,” Thompson said.
“So many of them are tied together through business and we have spouses on there. The development director has basically packed this board with people she knows will vote with her,” current board member Ashbee said.
Kennedy is a prime target of the complaint. It contends she, “hired unnecessary staff, further wasting ballet assets, in an effort to eliminate volunteers and cement her domineering, dictatorial control … has destroyed the resources of enthusiastic volunteers … is guilty of intentional self-dealing, intentional wasting of assets.”
The suit also alleges Kennedy, Parker and their husbands took a November 2015 trip to New Orleans to watch the Alvin Ailey Dance Company and charged a portion of the cost of their stay at the Windsor Court Hotel — along with mileage and other expenses — to Mobile Ballet.
In a Feb. 13 email, Parker, speaking on behalf of Kennedy, said the lawsuit “has not been reviewed by all concerned” and they would be in a better position to comment later.
“What you’re going to hear from her is, ‘Oh, I was over there to look at the Alvin Ailey Dance Troupe to see if Mobile Ballet wanted to bring them to Mobile to perform.’ Let me tell you what’s wrong with that: That was not her job. That’s the job for the artistic director, not the managing director,” Thompson said.
Corey was still artistic director at the time. The attorney isn’t sure the board even knew about the Crescent City junket, as records indicate Kennedy waited some seven months to seek reimbursement.
“We saw that when we were going through [the old financial records] and asked about it. At the meeting they had a defense of it. They said they paid for some of it out of their own pockets and it wasn’t as bad as it looked,” Ashbee said.
The complaint alleges Kennedy hired her husband, Jeff Kennedy, as official photographer for Mobile Ballet and that from 2013-16 they “inappropriately funneled $40,000 in photography services to his photography business without seeking competitive bids.”
The suit lists billed photographic services that climbed from $9,604 (July 2011 through June 2012) to $26,041.79 (July 2015 through June 2016). The suit also claims the Kennedys billed families for photo albums that were never produced.
In March 2016, Corey delivered a four-page letter to Board President Parker filled with concerns about the company and its leadership. The complaint maintains that Corey sought a follow-up discussion with Parker but the president told him he would have to “just get along” with Kennedy.
Corey’s unrest met with stronger resistance. An executive committee was formed that Thompson and plaintiffs maintain wasn’t allowed in the bylaws. On Aug. 26, 2016, that committee delivered a letter dated Aug. 3 to Corey. It changed him from a full-time employee to part-time, something the suit calls “an unauthorized constructive termination.”
“Everything came to our attention when Sandra Parker, Becky Tate, Chris Burgess and Liz Kirby sent the letter to Mr. Corey in August. That was the first we knew about any of this,” Davis said.
The Corey matter was the predominant topic of the Aug. 30 board meeting. According to the lawsuit, that meeting erupted as various motions were made and badgered down.
“A vote was taken and the Aug. 3 letter was retroactively ratified over the objections of Monty and Catherine Ashbee and Marie Grip and me,” Davis said.
According to the lawsuit, several directors said President Parker finally stopped proceedings with no proper adjournment.
“The meeting is over. I’m having a glass of wine and going to New Orleans for dinner,” Parker allegedly declared before exiting.
Corey’s original letter and its dozen complaints of mismanagement against Kennedy raised ire. A group of directors wanted to see financial records for themselves.
“In September, Beverly, Monty and I were the ones who requested the financial records when all of this came to a head back in August. We wanted to look into this information closer and they didn’t want to give us the financial records even though we’re board members,” Ashbee said.
Ashbee, Davis and Thull went into the Mobile Ballet offices on a quiet midweek morning and had a polite conversation with the receptionist. She was amenable.
“We asked her for the Quickbooks reports for 2011 through the current year. She said ‘sure.’ Then basically, as the day went on, we called and they wouldn’t give them. Later that afternoon, Beverly and Monty went back and were finally given the records,” Ashbee said.
“Catherine Ashbee and I sat down together after we received the detailed financial information that we struggled to get and went through it item by item. That was when we discovered how much money Jeff Kennedy had been making for services which before Karen Kennedy became director of development had been rendered gratis by the previous photographer,” Davis said.
Other things emerged. The board decided to discontinue using a youth curriculum called Angelina Ballerina, for which $500 per month was paid. Though they stopped teaching it, Kennedy never canceled the contract and the automatic payments continued for years.
“That is roughly $500 a month so that adds up to about $15,000 that’s just lost, it’s gone. I was horrified to see that,” Ashbee said.
Other oddities emerged. Mobile Ballet employed a website for student uniforms, students who in years past were sent to a local business for leotards.
“I discovered Mobile Ballet in the year 2015-16 paid a website $1,126.44. There’s a $122 charge for one, $165 for another, but one whopping fee was $818, all for ‘uniform samples.’ Mobile Ballet’s never done that before. Why was Mobile Ballet paying a website?” Ashbee said.
The lawsuit alleged Kennedy failed to maintain a donor letter campaign with a successful track record, to make a timely grant request, to maintain a volunteer network and mail out season ticket-holder renewal requests. Donors had dropped to a third of previous levels.
When Ashbee, Davis and Thull notified the rest of the board about the finances at the Oct. 17, 2016, meeting, the general response was “everyone makes mistakes.” Also at that meeting, board attorney Brooks Milling was in attendance. Directors say he’s been a fixture since.
According to the complaint, Corey’s attorney wrote the board demanding resignations. Board members demanded resignations from alleged conspirators but were ignored.
On Nov. 17, Ashbee and Thull presented the board with their financial findings. When the board was asked to reassess Kennedy’s leadership performance and future as director, the majority responded with a motion declining any discussion of her duties, past or future. It effectively gave her the job as long as she wanted.
“I’m an MBA. As a professional mind with an educated mind, I don’t understand how you can look at hard facts, printed in black and white, and not see something is going on here. Something’s very wrong,” Ashbee said.
The minority said they felt they had no choice. Legal action began.
“It would be a lot easier for me, quite frankly, to focus on my family. My wife just had two very serious rounds of cancer. I’ve got two daughters in college and high school that I’m doing all I can to nurture and raise. It would be much easier for me to settle back and work my 60-70 hours a week as a contractor and not fool with any of this business,” Thull said.
The suit seeks for the current board to be dissolved, the managing director to be terminated and interim replacements to be appointed. It also seeks damages against Kennedy and plaintiff’s attorney fees awarded.
Thompson said a court date is in Circuit Judge Jay York’s hands now. That first appearance is likely to be a preliminary hearing on a restraining order and injunction request.
“Frankly, it’s unlikely we would get to trial this month although I would think sometime in March is a more likely situation. Everybody is going to have to file an appearance because everybody will have to be lawyered up and prepare to present their side of things, so it’s hard for me to predict,” Thompson said.
While not a participant in the action, Thompson said Corey would likely be a witness.
“I’m deeply disconcerted with what’s been going on there, not only in the numbers involved but in the blatant conflicts-of-interest violation going on there. I look forward to having a judge sort that out. I know it will be eye-opening,” Thull said.