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February 05. 2013 6:37PM

Limited legal costs awarded in Mt. Washington Hotel suit


Former partners in the Mount Washington Hotel Limited Partnership, who have battled each other in court for the past 5 years, each were recently awarded partial legal costs. The historic hotel in Bretton Woods is currently managed by Omni Hotels. (FILE)

CONCORD - Former partners in the Mount Washington Hotel Limited Partnership, who have battled each other in court for the past 5½ years, each were awarded partial legal costs, but got nothing for attorney's fees, according to a Superior Court ruling.

Merrimack County Superior Court Judge Richard B. McNamara, who presides over the state's only business and commercial dispute docket, ruled last week that Joel Bedor and Wayne Presby, Mountain Properties Preservation Corp. and the Mount Washington Railway Co., were entitled to collect some legal costs. The expenses were incurred for expert witnesses at trial when Bedor and Presby defended themselves from a breach of fiduciary duty lawsuit brought by their former partners, Jeremiah and John Eames and the DeAmicis, Eberz, Parker and Poor families.

McNamara also ruled the plaintiffs could recover all non-expert costs they incurred in defending a defamation suit brought against them by Bedor and Presby.

Last July, McNamara ruled in Bedor and Presby's favor in the original lawsuit that alleged mismanagement of funds and self-dealing, but against them in the defamation suit they brought against their former partners. McNamara said they were not defamed when Jeremiah Eames sent out a letter to partners in October 2006 after a year-long investigation and based on the advice of his attorney.

The court will decide exactly what costs to award after both sides file affidavits, unless they are able to resolve the dispute themselves.

Jere Eames said he believes the latest court ruling "once again vindicates our position in even stronger wording." The latest decision, he maintains, reinforces his belief that there was a breach of fiduciary duty supported by trial testimony from numerous independent witnesses.

The Union Leader was unable to reach Bedor or Presby for comment.

The parties in the lawsuit were all limited partners of the former Mount Washington Hotel Limited Partnership (MWHLP). In 2007, the Eames family and other families sued Bedor, Presby, Mountain Properties Preservation Corp. and the Mount Washington Railway Company, known familiarly as the Cog, claiming mismanagement, the waste of partnership funds and self-dealing. The plaintiffs sought more than $6 million in damages, but got nothing when the court ruled against them on all counts.

Bedor and Presby countersued, claiming they were defamed. The court ruled against them and they, too, got nothing.

Later, both Bedor and Presby sought attorney's fees, expert witness preparation fees, expert witness costs and other costs. Eames argued against them being awarded anything, but said if costs were awarded, then their costs also should be offset because the claims and counterclaims were intertwined and inseparable.

The partnership was formed in 1991 when the group, all Littleton-area residents, bought the Mount Washington Hotel for $3.15 million at auction from the FDIC. Fifteen years later, they sold it for $86.5 million.

In the lawsuit, Eames maintained Bedor and Presby commingled assets of the resort and the Cog, and used hotel assets for the Cog's benefit.

According to court records, in the early years the Cog provided substantial benefits to the hotel, and the partnership grew to acquire the Bretton Woods Ski Area, its adjacent golf course and other assets, becoming known as the Resort. The Cog placed brochures, which included information about the Resort, at state rest stops. Hotels, the court noted, are generally prohibited from placing such brochures there, but because the Cog was a member of White Mountain Attractions, the Resort's promotional materials were included.

The Cog also paid the salaries of certain Resort employees in the early years of the operation.

Eames maintained the MWHLP gave the Cog more than $400,000 in labor that Bedor and Presby never recorded, accounted for or reimbursed. In turn, Bedor and Presby alleged the Resort received $520,660 in benefits from the Cog from 1991 to 2006.

Eames also alleged Bedor and Presby improperly paid the Cog's general manager $200,000 in an agreement never presented to the MWHLP board; entered into an option agreement with Charles Kenison, the Cog's general manager, which they alleged was blatant self-dealing; and paid Presby a $300,000 bonus for brokering the sale of the Resort to CNL/Celebration.

They also alleged the commingling of assets between the Cog and the Resort caused MWHLP assets to sell for between $3.18 million and $4.88 million less than warranted.

McNamara ruled against them on every issue.

The judge said much of the evidence showed use of the Cog's assets actually benefited the Resort and not vice-versa. And, he said, even if funds were diverted, it would amount to about $50,000 a year, an insignificant amount from an accounting standard in light of the Resort's revenues of $32 million in 2000 and $37 million in 2002.

The Resort is currently operated by Omni Hotel and Resort management.

pgrossmith@unionleader.com



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