2003 - 2004
September 4, 2004
Hockey coach's lawsuit dismissed by state judge
The ruling absolves three businessmen and the city from paying a prior judgment.
BY MATT WILLIAMS
GREENSBORO - A lawsuit alleging that the owner of the Greensboro Generals hockey team and the City of Greensboro defrauded a former coach was dismissed Friday by a state judge.
North Carolina Business Court Judge Ben Tennille ruled that Generals owner Art Donaldson isn't personally liable for a $109,752 court judgment won against the team's holding company in 2002 by former coach Jeffrey Brubaker. The ruling also absolved the city and two local businessmen, Don Brady and Bill Black, of responsibility stemming from their management of the team in the past season.
The ruling comes too late for the Generals' franchise itself, which was dissolved by the ECHL in July after five seasons of financial losses. Owners blamed the suit in part for scaring off potential investors for the team.
Brubaker was fired as coach of the minor-league franchise in 2001 with a year remaining on his contract. He later sued for breach of contract and won the court judgment against the holding company, Greensboro Professional Sports, for the salary he would have earned.
But when a court official tried to collect the money from the company, there were no assets to pay the claim. Brubaker argued that Donaldson, the majority owner of the team, moved the Generals' assets through two separate holding companies to avoid paying Brubaker and other creditors.
In court filings, Brubaker alleges that Donaldson told him when he was fired that it would be fruitless to file a lawsuit.
"We're going to form a new corporation," Brubaker recalled Donaldson telling him. "And your contract is with the old corporation. We're going to bankrupt the old corporation, transfer all of the assets to the new corporation, and you can sue us and get in line behind all the other creditors."
At issue in the case was not whether Brubaker was owed back pay but instead who was responsible for paying it. Brubaker's attorney, Ervin Brown, argued that the transfers were a "fraudulent conveyance" and that Donaldson should be held personally responsible for the companies' actions.
Brown also filed motions to add the City of Greensboro, Brady and Black as defendants because they operated the Generals' franchise for the past season. He argued they should be added as parties in the case because they benefited from Donaldson's conveyances.
Donaldson argued that he shouldn't have to pay the claim because the judge in the breach of contract case absolved him of personal responsibility. The judge agreed, saying the question of Donaldson's liability for the claim was a settled issue that couldn't be revisited.
Tennille also ruled that Brady, Black and the city were not responsible because they merely leased and operated the team from Donaldson. The three defendants were not involved with the team when Brubaker was fired.
Brown said he was "extremely disappointed" by the ruling that Donaldson's responsibility could not be reviewed. He noted that several of the ownership transfers at the heart of his argument occurred after the judge ruled in the first case.
Brown said his client hadn't made a decision whether to appeal.
Deputy City Attorney Terry Wood said he was pleased with the ruling and repeated that the city wasn't responsible for Brubaker's problems.
"We really shouldn't have been involved in it," Wood said.
Donaldson, Brady and Black could not be reached for comment.
Contact Matt Williams at 373-7004 or email@example.com