IN THE CIRCUIT COURT OF MOBILE COUNTY ALABAMA MONTY THULL, Mobile Ballet, Inc. Board Member; acting on behalf and in the best interest of, Mobile Ballet, Inc.; BEVERLY DAVIS, Mobile Ballet, Inc. Board Member; acting on behalf and in the best interest of, Mobile Ballet, Inc.; RHEA MOSTELLAR, Immediate Past Board* Member and long time supporter; acting on behalf and in the best interest of, Mobile Ballet, Inc. Plaintiffs, V. BECKY S. TATE, Mobile Ballet Inc. Ex Of?cio Board Member; SANDRA PARKER, Mobile Ballet, Inc. Board Member; JIM PARKER, Mobile Ballet, Inc. Board Member; JILL RINGOLD, Mobile Ballet, Inc. Board Member; LIZ KIRBY, Mobile Ballet, Inc. Board Member; CHRIS BURGESS, Mobile Ballet, Inc. Board Member; MARY BYRD, Mobile Ballet, Inc. Board Member; LESLIE JOHNSON, Mobile Ballet, Inc. Board Member; JULEE WALDROP, Mobile Ballet, Inc. Board Member; BARBARA Y. CORTE, purported Mobile Ballet, Inc. Board Member; KAREN M. HHEFIO oror vwvavw ?Amnoo anaow ao .LHDOC) rmomo ?x WV 902! I 110mm (TFVIH mwowoaloma Civil Action No.: 20! 3 0 022$ KENNEDY, purported Managing Director, Mobile Ballet, Inc.; Defendants. ORIGINAL VERIFIED COMPLAINT TO THE HONORABLE JUDGES OF THE CIRCUIT COURT OF MOBILE COUNTY, ALABAMA: MAY IT PLEASE THE COURT: 1. Come plaintiffs, Monty Thull, (?Thull?), and Beverly Davis, (?Davis?), as members of the Board of Directors of Mobile Ballet, Inc., (?Mobile Ballet?), and Rhea Mostellar, (?Mostellar?), as an immediate past member of the Board of Directors of Mobile Ballet, representing and acting on behalf and in the best interest of, Mobile Ballet and aver this Original Veri?ed Complaint, their derivative lawsuit, against the defendants, Becky S. Tate, Sandra Parker, MD, Parker?), Jim Parker, MD, . Parker?), Jill Ringold, MD, (?Ringold?), Liz Kirby, (?Kirby?), Chris Burgess, (?Burgess?), Mary Byrd, Leslie Johnson, (?Johnson?), ulee Waldrop, (?Waldrop?), Barbara Y. Corte, (?Corte?), and Karen M. Kennedy, (?Kennedy?), for their individual, intentional misconduct and their conspiracies to commit intentional acts of misconduct, including, but not limited to: multiple con?icts of interest, exceeding lawful authority; intentional breach of ?duciary duty to Mobile Ballet, intentional wasting of Mobile Ballet -2- assets, misapplication of Mobile Ballet ?mds; intentional self dealing with Mobile Ballet assets, repeated and multiple intentional failures to act in the best interest of Mobile Ballet; repeated and multiple intentional violations of the Alabama Non? Pro?t Corporation Act, Code of Alabama 10-3A-l, et seq., repeated and multiple intentional violations of the Mobile Ballet, Articles of Incorporation and Bylaws, repeated and multiple intentional violations of the Alabama Non~Pro?t Corporation Association?s, Standards Of Excellence and repeated and multiple intentional abuses of process and procedures applicable to non-pro?t corporations such as Mobile Ballet, which should be operated and managed with integrity and in the best interest of the public being served, in this case, the Mobile Community. Plaintiffs, Thull, Davis and Mostellar will fairly and adequately represent the interests of Mobile Ballet and the public it serves in enforcing the rights of Mobile Ballet in this lawsuit against the defendants. AVERMENT OF BACKGROUND FACTS 2. The great cities of the world, New York, Washington, London, Paris, Vienna, Chicago, Boston, San Francisco and Miami have each been strong supporters of the arts including the art of classical ballet. Of the visual arts, classical ballet is perhaps the most dynamic, combining many elements of the other art forms in the exquisite movement of the human body in and technique to glorious classical music, beautifully costumed and performed on grand stages with custom designed sets, props and lighting. Classical ballet, beautifully and expertly performed, transcends adequate description with words but never fails to deeply inspire both dancers and audience members, who join together in the dramatic creation of this sublime art form. The citizens of Mobile have also been privileged for thirty years to be inspired and enriched by the creative gifts of Winthrop Corey, who until recently has been the artistic director of Mobile Ballet. Each of these other great cities offer world class performances of music, opera and classical ballet for the enrichment of their citizens. The leadership of these great cities also recognize that corporations, businesses, professional people, lovers of the arts and ?nancial investment are attracted to metropolitan areas that have strong arts offerings, including classical ballet. 3. Classical ballet has not had a particularly long history in Mobile and before 1960, was limited to training in a few local ballet schools with very limited performance offerings at year end school recitals. In the mid 1960's, the old Mobile Civic Ballet had a short life in the city but with limited public performances. It never performed full length classical ballets. Ominously, although he had danced for the famed Ballet Russe de Monte Carlo, the artistic director of the Mobile Civic Ballet, Mr. Duane Dishion, resigned his position -4- because he had lost support of the board of directors. Soon after that resignation, the Mobile Civic Ballet failed. During the remainder of the 1960's and the 1970's, there was no active classical ballet company in Mobile. In the summer of 1975, Mobilians flocked to New Orleans for performances of the full length classical ballets, Swan Lake, Spartacus and Giselle, by the world renowned, Russian, Bolshoi Ballet. Not until the early 1980's were new efforts made to establish a classical ballet company in Mobile. Alabama Dance Theatre, a/k/a, Ballet Mobile, Burch?eld Ballet, a/k/a, Ballet Bienville all made ?edgling efforts to establish a permanent classical ballet company in Mobile. Those efforts, though largely unsuccessful, lead to Mobile Ballet and Winthrop Corey. 4. The history of classical ballet in Mobile for the past thirty years, since the arrival in 1987 of Winthrop Corey as Artistic Director of Mobile Ballet, has been nothing short of astonishing. Before his arrival in Mobile, Mr. Corey had an outstanding and highly distinguished performing career as a principal dancer with the Royal Winnipeg Ballet and the National Ballet of Canada where he danced with Rudolph Nureyev for several years. In 1976, he founded and established the Festival Ballet in Providence, Rhode Island, which continues as a vibrant, successful, professional classical ballet company. Mr. Corey?s vision and many talents have taken a non-professional, youth ballet company composed of unior and senior high school young people, trained them in classical ballet technique and enabled them to offer the Mobile community high caliber performances of the classical ballets, including, The Nutcracker, Swan Lake, Sleeping Beauty, Romeo Juliet, Cinderella, Coppellia, Giselle and others. Before Mr. Corey, the classical ballets had never been consistently offered by a local ballet company to Mobile audiences. Mr. Corey has also conceived and produced original choreography and his Mobile Ballet dancers have expertly performed world premiers, and additional performances in Mobile, of his popular classical ballets, Dracula, A Streetcar Named Desire and Snow White. For thirty years, Mr. Corey also conceived, designed and produced world class costumes for his dancers and the enjoyment of Mobile Ballet audiences. By any reasonable measure, a city the size of Mobile has been incredibly fortunate to have a person of the experience, talents, vision and kindness of Winthrop Corey as Artistic Director of Mobile Ballet. 5. The defendants through their multiple con?icts of interest and intentional breach of ?duciary duty and conspiracy to do so, and their disdain for Winthrop Corey?s thirty year accomplishments, have not acted in the best interest of Mobile Ballet and have created a toxic work environment at Mobile Ballet, which has resulted in the intentional, constructive discharge of Winthrop Corey from his position as Artistic Director at Mobile Ballet. By defendants? intentional and multiple breaches of their ?duciary duty, if allowed to continue, Mobile Ballet and classical ballet in Mobile, as we have known and enjoyed it for thirty years, will be destroyed. THE PARTIES 6. Plaintiff, Monty Thull, resides in Mobile and is a local businessman who owns a contracting company located in Mobile and has had children dance at Mobile Ballet. He has been a member of the Board of Directors of Mobile Ballet for six years and has appeared in Mobile Ballet productions in character roles for many years. 7. Plaintiff, Beverly Davis, is a resident of Mobile and has been a member of the Board of Directors of Mobile Ballet for over twenty years and has also appeared in character roles in Mobile Ballet productions for many years. She and her husband, Steve Davis, MD, have been long time ?nancial supporters of Mobile Ballet. As presently constituted, Beverly Davis is, by far, the longest tenured member of the Mobile Ballet Board. 8. Plaintiff, Rhea Mostellar, is a resident of Mobile and an immediate past member of the Board of Directors of the Mobile Ballet. She has served as a board member for most of the past thirty years. She and her husband have been long time ?nancial supporters of Mobile Ballet for more than thirty years and Ms. -7- Mostellar has appeared in character roles in Mobile Ballet productions for many years. 9. Defendant, Becky S. Tate, Ex Of?cio member of the Mobile Ballet Board, is a local business woman, residing in Mobile, employed as an executive at the University of South Alabama Foundation, who has had no previous experience with the art of ballet or with the operation of a ballet company. She became a member of the Mobile Ballet Board in 2010, serving as board president for three years from 2012 through 2015. Defendant, Liz Kirby, secured her current position as assistant to the director of the University of South Alabama Children?s and Women?s Hospital at the recommendation of defendant, Tate. Defendant, Julee Waldrop is the wife of the President of the University of South Alabama, Dr. Tony 0. Waldrop, who is also a member of the Board of Directors of the University of South Alabama Foundation, defendant, Tate?s employer. Defendant, Tate, also has close social relationships with defendants, S. Parker, J. Parker, Corte, Kennedy and Ringold. Con?icts of interest exist between defendants, Tate, S. Parker, J. Parker, Corte, Kennedy, Ringold, Kirby, Tucker and Waldrop, that prevents defendant, Tate, or the other said defendants from exercising independent judgment in the best interest of Mobile Ballet. 10. Defendant, Sandra Parker, MD, is a medical doctor residing in -3- Baldwin County but working in Mobile County as an executive at Altapointe Health Systems, Inc., 5750 Southland Drive, Mobile, Alabama 36693, (?Altapointe?). She is also Vice Chairman of the University Of South Alabama College Of Medicine Department Of and an associate professor. Defendant, S. Parker, is married to defendant, J. Parker, and is current president of the Mobile Ballet Board having held the position since 2015. Incredibly, defendant, S. Parker, admitted at a public meeting on December 16, 2016, that she did not know anything about ballet and by reasonable inference about the management of a ballet company and that she had to ask an employee of Mobile Ballet, Zoe Todd, to inform herself about ballet and the management of a ballet company. Defendant, S. Parker, admitted at the public meeting that, talk to Zoe about everything.? Defendant, S. Parker, also directs thousands of dollars worth of prescription drug referrals to the compounding pharmacy owned by defendant, Chris Burgess. Defendant, S. Parker, has publically admitted that she lacks competence to be president of the Mobile Ballet Board of Directors and her independent judgment in the best interest of Mobile Ballet is further compromised by her close social friendships with defendants, Tate, Corte, Kennedy and Ringold. Con?icts of interest exist between defendant, S. Parker and defendants, J. Parker, her husband, Tate, Burgess, Corte, Waldrop, Kennedy and Ringold, that -9- prevent defendant, S. Parker or the other said defendants from exercising independent judgment in the best interest of Mobile Ballet. Defendant, Jim Parker, MD, is the husband of defendant, S. Parker, and is a member of the Mobile Ballet Board of Directors. He has never voted in Opposition to his wife over any matter presented for vote during Mobile Ballet Board meetings. Defendant, J. Parker?s, independent judgment in the best interest of Mobile Ballet is compromised by his wife?s position on the Mobile Board, her business dealings with defendant, Burgess, and by his close social friendships with defendants, Tate, Corte, Kennedy and Ringold. A con?ict of interest exists between defendant, J. Parker, and defendants, S. Parker, Tate, Burgess, Corte, WaldrOp, Kennedy and Ringold, that prevents defendant, J. Parker, or the other said defendants from exercising independent judgment in the best interest of Mobile Ballet. 12. Defendant, Jill Ringold, MD, resides in Mobile, where she works as a medical doctor, having obtained her medical degree from the University of South Alabama. She is a member of the Board of Directors of Mobile Ballet. Defendant, Kirby, participated in the business decision to hire defendant, Ringold, as an employee at Greater Mobile Urgent Care where she is presently employed. Defendant, Ringold?s, independent judgment in the best interest of Mobile Ballet -10- is compromised by her social ?'iendships with defendants, S. Parker, J. Parker, Tate, Corte and Kennedy and her business relationship with defendant, Kirby. Con?icts of interest exist between defendant, Ringold, and defendants, S. Parker, J. Parker, Tate, Corte, Kirby and Kennedy that prevent defendant, Ringold and the other said defendants from exercising independentjudgment in the best interest of Mobile Ballet. 13. Since November 15, 2015, defendant, Liz Kirby, a resident of Mobile, has been the assistant to the administrator at the University of South Alabama Children?s Women?s Hospital, a position that defendant, Tate, helped her to secure. Prior to her current position, defendant, Kirby, served as practice administrator at Greater Mobile Urgent Care, where she developed the startup of five clinics between 2010 and 2015, including the clinic in Springhill where defendant, Ringold presently works. Defendant, Kirby, participated in the business decision to hire defendant, Ringold, to work at Greater Mobile Urgent Care. Defendant, Kirby, is currently a member of the Mobile Ballet Board. Con?icts of interest exist between defendant Kirby and defendants, Tate and Ringold, that prevent defendant Kirby and said defendants from exercising independent judgment in the best interest of Mobile Ballet. l4. Defendant, Chris Burgess, is a resident of Baldwin County and a -11- member of the Mobile Ballet Board and since 2006 has owned Rockwell Pharmaceuticals, f/k/a, Heritage Compounding Pharmacy, a compounding pharmacy, specializing in custom pharmaceuticals. Defendant, Burgess? pharmacy annually sells thousands of dollars of custom pharmaceuticals to Altapointe, or the patients of Altapointe, where defendant, S. Parker, is an executive. Defendant, Burgess, has admitted at an open meeting of the Mobile Ballet Board in August of 2016, that am just a ballet Dad and my daughter is working to get into the Mobile Ballet Company.? Defendant, Burgess, has a business con?ict of interest with defendant, S. Parker, who is an executive with one of defendant, Burgess? good customers, Altapointe and Altapointe?s patients. By his own admission and by his business con?ict of interest with Mobile Ballet Board President, S. Parker, defendant, Burgess, cannot exercise independent judgment in the best interest of Mobile Ballet, nor can defendants, S. Parker or J. Parker. 15. Defendant, Mary Byrd, is a resident of Mobile and has been a member of the Mobile Ballet Board since August 2016, when she was proposed for membership on the board by her personal friend, defendant, Kennedy. Defendant, Byrd, has a con?ict of interest with defendant, Kennedy, that prevents defendant, Byrd, from exercising independent judgment in the best interest of Mobile Ballet. -12- 16. Defendant, Leslie Johnson, is a resident of Mobile and has been a member of the Mobile Ballet Board since August 2016. She was proposed for membership on the Mobile Ballet Board by defendant, S. Parker, after she passed the unlawful and unnecessary approval of defendant, Kennedy. Defendant, S. Parker, said at the meeting when she prOposed defendant, Johnson, for board membership that she had gotten to know her when she called on her at Altapointe in her capacity as a pharmaceutical sales representative. By her own admission and by her business con?ict of interest Mobile Ballet Board President, defendant, S. Parker, cannot exercise independent judgment in the best interest of Mobile Ballet, nor can defendants, J. Parker nor Johnson. 17. Defendant, Julee WaldrOp, a member of the Mobile Ballet Board, residing in Mobile, is the wife of Dr. Tony 0. Waldrop, the President of the University of South Alabama, who is also a member of the Board of Directors of the University of South Alabama Foundation, where defendant, Tate, is an executive. A con?ict of interest exists between defendants, Tate, S. Parker, J. Parker and defendant, Waldrop, that prevents defendant, Waldrop, and defendants, Tate, S. Parker and J. Parker from exercising independent judgment in the best interest of Mobile Ballet. 18. Defendant, Barbara Y. Corte, who resides in Baldwin County, is a _13_ purported member of the Mobile Ballet Board. She was on the Board during the ?scal year 2015/2016 but failed to attend more than three Mobile Ballet Board meetings in a row, which under the By-laws, constitutes cause for expulsion from the board. Defendant, Corte, is a long time friend of defendant, Kennedy, having worked with her as co-chairwomen of the Thomas Hospital, Summer Ball from which they were both terminated for poor performance of their duties. Defendant, Corte, is a close social friend of defendants, Tate, S. Parker, J. Parker and Ringold. Defendant, Corte, has been invited to Mobile Ballet Board meetings by defendants, Tate, S. Parker, J. Parker and Kennedy, to cast an illegal vote on matters that were not in the best interest of Mobile Ballet all in violation of the Mobile Ballet By-laws and Alabama Law. Corte is not a legal member of the Mobile Ballet Board and as recently as the November 17, 2016, meeting of the Mobile Ballet Board, cast illegal votes in violation of Alabama Law and the Mobile Ballet By-laws. Additionally, con?icts of interest exist between defendant, Corte, and defendants, Tate, S. Parker, J. Parker, Kennedy and Ringold, that prevent defendant, Corte, or said defendants from exercising independent judgment in the best interest of Mobile Ballet. l9. Defendant, Karen M. Kennedy, is a resident of Baldwin County and a former member of the Mobile Ballet Board, including service as Board President -14- during 2011 and 2012. She was employed by Mobile Ballet as part time Development Director in 2012. Shortly after she assumed the presidency of the Mobile Ballet Board, in 2012, without notice to, consideration by or authorization of, the Mobile Ballet Board, defendant, Tate, named defendant, Kennedy, as the purported Managing Director of Mobile Ballet. Defendant, Tate?s, actions were unauthorized by the Mobile Ballet Board in violation of Alabama Law and in violation of the Mobile Ballet Articles of Incorporation and By-laws. Defendant, Kennedy has a checkered business history in the Mobile area having been terminated from previous employments at Mercy Medical, Little Sisters of The Poor, and from her position as co?chairwoman of the Thomas Hospital, Summer Ball. In addition, defendant, Kennedy?s, business venture, Pradcom, Inc., a/k/a Pradcom Marketing, was a commercial failure. Nevertheless, without proper authorization by the Board, defendant, Kennedy, began to act as the Managing Director of Mobile Ballet and assume responsibility for the Nutcracker Charity Ball in 2012. Defendant, Kennedy, immediately began to micro-manage in a domineering and dictatorial way and cast a pall of secrecy over the business activities of Mobile Ballet and over the Nutcracker Charity Ball. Defendant, Kennedy, from 2012 and as recently as September 2016, refused to provide detailed ?nancial records to board members who requested them, for Mobile -15- Ballet or the Nutcracker Charity Ball activities. Defendant, Kennedy, began to attempt to perform duties and functions that had previously been performed by a host of volunteers at no charge to Mobile Ballet. Defendant, Kennedy, hired unnecessary staff, further wasting ballet assets, in an effort to eliminate volunteers and cement her domineering, dictatorial control over the processes, procedures and business activities of Mobile Ballet and the Nutcracker Charity Ball. In the process, defendant, Kennedy, has destroyed the resource of enthusiastic volunteers at Mobile Ballet and for the Nutcracker Charity Ball. Defendant, Kennedy, has usurped law?ll authority of the Mobile Ballet Board, is guilty of ultra vz'res activities, and failed to act in the best interest of Mobile Ballet. Defendant, Kennedy, is guilty of intentional self dealing, intentional wasting of Mobile Ballet assets, con?ict of interest, general incompetence and other misfeasance. Defendant, Kennedy, has con?icts of interest with defendants, Tate, S. Parker, J. Parker, Kirby, Burgess, Ringold, and her own husband, Jeff Kennedy, that prevent her ??om exercising independentjudgrnent in the best interest of Mobile Ballet. Defendant, Kennedy, has consistently failed to act in the best interest of Mobile Ballet. 20. The Gordian tangle of multiple con?icts of interest among the hostile defendant majority on the Mobile Ballet Board has done, and is continuing -15- to do, irreparable and immediate damage to Mobile Ballet, its ?nances, its law?il procedures and processes and its good will and reputation in the community. GENERAL AVERMEN TS OF FACT History Of Mobile Ballet 21. With Winthrop Corey?s arrival in Mobile in 1987, Mobile Ballet began to ?ourish. The Mobile Ballet School was established to train young dancers in the technique of classical ballet to prepare them to perform in annual performances of The Nutcracker, a fall and spring classical ballet production and a year?end performance Showcase. Mr. Corey conceived, designed and produced costumes of spectacular beauty for his dancers to wear in productions of the great classical ballets. Such productions by a local ballet company with such costumes had never been seen before by Mobile audiences. Mobile Ballet and Corey developed a loyal Mobile following of not only ballet lovers but of a broad array of peOple who came to appreciate the unique and special artistic excellence on display every time Mobile Ballet performed. Dancers came from the surrounding area, Florida and Mississippi, to be trained by Mr. Corey and dance in his productions. The ballet world throughout the country also began to take notice of what was occurring at Mobile Ballet. Guest artists from all over the United States became eager to come to Mobile to perform in the productions of Mobile -17- Ballet. Its dancers began to be accepted in prestigious summer training programs throughout the country, they received college scholarships and they began to be hired for professional careers by leading ballet companies in New York, Cincinnati, Houston, and elsewhere and for careers on Broadway and with the Rockettes. 22. Professional accolades have been showered on Mr. Corey, throughout his thirty years at Mobile Ballet bringing great credit and honor to Mobile Ballet. Defendant, S. Parker, admitted during a recent meeting with dancers and their parents on December 16, 2016, that Winthrop Corey has been - Mobile Ballet - for thirty years. During the summers for twenty-two years, he was invited to teach at the prestigious Jof?ey summer dance training programs in New York. He has been invited to set his ballets on other ballet companies across the nation. From 2002 - 2009, Mr. Corey was invited to New York to privately coach dancers from around the world who were competing in the New York International Ballet Competition. He taught at the American Ballet Theatre Summer program in 2008. In 2014, he was one of ?fteen classical ballet teachers from around the world to be selected and invited to participate in the week long ballet teacher training program at the Paris Opera Ballet in Paris, France. He has been invited to return to the Paris Opera Ballet in December 2017 to lecture on his experience dancing with Rudolph -18- Nureyev in Jose Limon?s, The Moor?s Pavane on the occasion of the celebration of Nureyev?s eightieth birthday. Mr. Corey?s other accomplishments and honors are too numerous to mention. Origins Of The Present Crisis At Mobile Ballet, Inc. 23. The present crisis at Mobile Ballet began in 2012, with the following: (1) (2) (3) The Mobile Ballet Board began to be taken over by persons without experience administering an arts organization such as Mobile Ballet. That year, defendant, Tate, became the president of the Mobile Ballet Board with only two years experience on the board and defendant, Kennedy, despite her failures at other business and charitable endeavors, was hired by the board as a part time development director. Over the next four years, defendant Tate, with assistance from the other defendants named in this complaint set about packing the Mobile Ballet Board with defendants?, Tate, S. Parker and Kennedy?s, business and professional associates and personal friends. These persons included defendants, Kirby, Byrd, Johnson, Waldrop, Burgess, Johnson and others who were -19- loyal to defendants, Tate, S. Parker and Kennedy, and would vote on matters that came before the Mobile Ballet Board the same way as said defendants, Tate and S. Parker, and in favor of defendant, Kennedy. (4) From 2012 2016, social friendships were also developed by defendant, Tate, with defendant board members, S. Parker, J. Parker, Ringold, Burgess and Corte, to in?uence their votes as members of the Mobile Ballet Board. (5) When defendant, 3. Parker, became board president in 2015, she followed Tate?s example and unlawfully recommended friends and business associates to the board. 24. Also, beginning in the fall of 2012, defendant, Tate, unlaw?Jlly, without authority, appointed defendant, Kennedy, as managing director of Mobile Ballet. This clandestine, unauthorized move by defendant, Tate, was kept secret for over a year. During a board retreat in August 2013, defendant, Kennedy, was represented to the board as being the development director with no mention that she had, without authorization been appointed managing director. But in the fall of 2012, Defendant, Kennedy, without authorization, unlawfully began performing duties reserved exclusively for the Mobile Ballet Board. For example, defendant, -20- Kennedy, a Mobile Ballet employee, as unlawfully authorized by defendant, Tate, vetted and had dictatorial approval over any person proposed for membership on the Mobile Ballet board. Defendant, Tate, allowed defendant, Kennedy, to unlaw?illy decide who would be on the board of directors. Every person proposed for board membership by order of defendant, Tate, had to be approved by defendant, Kennedy, before their name would be submitted to the board for approval. Defendant, Kennedy, was unlawfully given dictatorial control over who became a board member and who did not. Defendant, Kennedy, unlawfully set the agendas for Mobile Ballet board meetings. She unlawfully took and prepared the minutes at regular board meetings usurping the lawful duty of the Mobile Ballet board secretary. Defendant, Kennedy, ingratiated herself to defendant, Tate, and to her successor, defendant, S. Parker, by unlawfully performing many of their duties as board president. All of these actions by defendant, Kennedy, were done unlaw?illy and without the authorization of the Mobile Ballet Board, because defendants, Tate and S. Parker, were too busy to perform the duties of Mobile Ballet Board President. During the period from 2012 to 2016, defendant, Kennedy, was demanding, and receiving, increases in salary from the Mobile Ballet Board, at the recommendations of defendants, Tate and S. Parker. -21- Intentional Unlawful Conduct 0f Defendant. Karen M. Kenne? 25. At the same time, that she was currying favor with Mobile Ballet Board presidents, defendant, Kennedy, was engaged in: (I) intentionally self dealing; (2) intentionally misapplying and wasting Mobile Ballet assets; (3) intentionally making unauthorized and wasteful expenditures, which included con?icts of interest with her husband?s photography business; (4) intentionally failing to maintain reasonable business hours; (5) intentionally failing to perform her job functions, including repeated refusals to provide board members with detailed ?nancial records of Mobile Ballet; (6) intentionally launching a campaign with Mobile Ballet Board members and ballet staff employees to discredit Winthrop Corey, while maintaining dictatorial control over the ballet of?ce staff; (7) unlawfully controlling who was proposed for Mobile Ballet board membership and who was not; (8) intentionally disbanding the Nutcracker Charity Ball Committee; (9) unlawfully, with defendants, Tate and S. Parker, disbanding the Finance Committee of the Mobile Ballet board; and (10) intentionally breaching her ?duciary duty to Mobile Ballet, among other things. The hostile, defendant majority board members have ignored defendant, Kennedy?s misconduct. 26. Defendant, Kennedy?s, self dealing, which began in 2012 and continues to the present date has included taking out of town trips at Mobile Ballet -22- expense, which were not within her job description and not justi?ed for business purposes, including a trip to New Orleans in November 2015, where she and her husband stayed at the Windsor Court Hotel and charged a portion of the bill to Mobile Ballet in addition to mileage and other expenses. She also joined the Alabama Non?pro?t Association as an individual member, at Mobile Ballet expense, in an effort to improve her image and to cover her self dealing. She has ignored many of the Standards Of Excellence promoted by that organization for the credibly honest management of non-pro?t corporations in Alabama, in her management of Mobile Ballet. Defendant, Kennedy, has further covered her self dealing, until very recently, by refusing from 2012 through 2016 to give Mobile Ballet Board members detailed ?nancial information, which would have revealed her self dealing and her failing to act in the best interest of Mobile Ballet. An example of such unlawful conduct by defendants, Kennedy and S. Parker, was their September 27, 2016, unlawful multiple refusals to give board members, Thull, Davis and Catherine Ashbee, detailed ?nancial records until they were ordered to do so by Mobile Ballet?s lawyer. Defendant, Kennedy, and her hostile board member defendant allies have refused to provide detailed ?nancial accounting for Mobile Ballet fund raising events including, the Nutcracker Charity Ball, 2012-2016, and the 2015 Decorator Show House among other fund raising -23- events. 27. Another serious example of defendant, Kennedy?s, breach of ?duciary duty and incompetence, began in 2014. In the spring of 2014, Mobile Ballet decided not to renew the Angelina Ballerina license that it had acquired two years earlier at a fee of approximately $500.00, which was deducted by automatic bank draft from the Mobile Ballet operating bank account every month. In a meeting in the Mobile Ballet board room with Mr. Corey and Pamela Thompson, then associate director of the Mobile Ballet School, defendant, Kennedy, was that the Mobile Ballet School would not be using the Angelina Ballerina curriculum beginning in the fall of 2014. Defendant, Kennedy, was speci?cally told to cancel the Angelina Ballerina license. Defendant, Kennedy, failed to cancel the license. Incredibly, she failed for over two and a half years to detect the automatic $500.00 per month Angelina Ballerina withdrawal from the Mobile Ballet bank account. As the unlawfully appointed managing director, she demonstrated continuing incompetence by failing to reasonably review the Mobile Ballet bank statements, which revealed the Angelina Ballerina withdrawals. The only reason she discovered the ballet?s on-going loss was because plaintiff board members, Thull and Davis, and Catherine Ashbee, on September 27, 2016, demanded copies of Mobile Ballet?s detailed ?nancial -24- records for 2012-2016. Defendant, Kennedy, had refused for four years to give the Mobile Ballet Board, bank statements and detailed ?nancial records. Defendant, Kennedy, failed to cancel the license agreement for over two and a half years and approximately $15,000.00 in ballet funds and donations were wasted. When made aware of defendant Kennedy?s wastefulness during the October 17, 2016, board meeting, the hostile board majority?s only response was that ?everyone makes mistakes.? The hostile, defendant board members approved of defendant, Kennedy?s, incompetence. 28. In addition to the unauthorized spending set forth above, defendant, Kennedy, intentionally engaged in self dealing with her husband and from 2013 through 2016, inappropriately funneled over $40,000.00 in photography services to his photography business without seeking competitive bids. All other services procured by Mobile Ballet, pursuant to the special order of defendant, Kennedy, required competitive bids. She simply gave Mobile Ballet?s photography business to her husband. And many of these photography services were for unnecessary work for which the ballet had never historically hired a professional photographer. Amazingly, Mobile Ballet received few if any actual photographs for the fees it was charged by Jeff Kennedy. This is but another example of defendant, Kennedy?s self dealing, con?ict of interest and intentional breach of ?duciary -25- duty. 29. The signi?cant increase in annual photography expenses paid by Mobile Ballet to Jeff Kennedy re?ect the signi?cant ?nancial damage suffered. Karen Kennedy?s employment as development director began in the summer of 2012. Soon thereafter, annual video and photography expenses more than doubled. Annual video and photography expenses at Mobile Ballet since 2011 are as follows: July 2011 June 2012 $9604.00 July 2021 June 2013 $12,021.83 July 2013 - June 2014 $20,689.56 July 2014 June 2015 $23,385.82 July 2015 - June 2016 $26,041.79. 30. Another example of defendant, Kennedy?s, gross, intentional self dealing and intentional con?ict of interest involves the Nutcracker Charity Ball and her husband, Jeff Kennedy?s, photography business. In 2012, defendant, Kennedy, took over the management of the Nutcracker Charity Ball. Soon thereafter, without seeking competitive bids, she employed her husband Jeff to provide photography services to produce photos for Mobile Ballet and for a ball photo book promised to Deb families and for which they paid a fee in the years ?26- 2012 - 2015. Without authorization, defendant, Kennedy, named her husband as the of?cial photographer of Mobile Ballet and the Nutcracker Charity Ball. No photo books have ever been produced for these years. The reason no photo books have been produced is due to Karen Kennedy?s intentional self dealing and intentional con?ict of interest. 31. Although she repeatedly promised Deb families from 2012 - 2015 that they would receive a ball photo book, which they had paid for, defendant, Kennedy, had no real interest in producing such a book. To do so would have diminished the revenue received by her husband?s photography business from Deb families. Defendant, Kennedy, falsely promised Deb families a ball photo book and then intentionally failed to deliver the book. Such failure forced the Deb families to go to her husband and pay him additional money for ball photos many of which would have been included in the promised ball photo book. The direct effect of defendant, Kennedy?s, intentionally false and misleading promises that a ball book would be provided was to increase the revenues received by her husband?s photography business for photos he took at the Nutcracker Charity Ball, at the expense of Mobile Ballet?s good will and reputation. Jeff Kennedy?s photography business has undoubtedly made tens of thousands of dollars in additional revenues, unknown to Mobile Ballet, from Nutcracker Charity Ball Deb -27- families directly due to his wife, defendant, Kennedy?s, self dealing and con?ict of interest. 32. But Mobile Ballet also suffered ?nancial damages, directly caused by defendant, Kennedy?s, intentional self dealing and intentional con?ict of interest. Mobile Ballet has paid Jeff Kennedy to take photos to produce the Nutcracker Charity Ball Photo Books that were never produced. Mobile Ballet received no material bene?t from Jeff Kennedy?s photographs for which it paid Mr. Kennedy. Defendant, Kennedy, was directly responsible for having Mobile Ballet pay her husband for photographs, which were never delivered to Mobile Ballet and were of little, if any, use to Mobile Ballet since Nutcracker Charity Ball Photo Books were never produced. Such misappropriation of Mobile Ballet Funds was executed by defendant, Kennedy, with the apparent approval of the hostile defendant, majority board and can only be described as a fraudulent scam. 33. Defendant, Kennedy, is paid as a full time employee at Mobile Ballet, even though her position as such has never been authorized by the Mobile Ballet Board. But, she rarely, if ever, spends eight hours per work day at Mobile Ballet?s of?ce. If she had maintained anything near regular business hours and done her job, perhaps she would have discovered the Angelina Ballerina license fee debacle that resulted in as much as $15,000.00 wasted. Yet defendant, Kennedy, hired -23- additional unnecessary staff at Mobile Ballet to make complete her dictatorial control of the Mobile Ballet of?ce and further wasting of its assets. 34. The board secretary treasurer, defendant, Burgess, breached his ?duciary duty to Mobile Ballet by negligently failing to review its ?nancial records on a basis. Defendant, Burgess, negligently failed to review the bank statements and ?nancial statements for Mobile Ballet. Defendant, Burgess, further breached his ?duciary duty by failing to provide detailed ?nancial records for board members to review at regular board meetings. Had defendant, Burgess, done his job as treasurer, defendant, Kennedy?s negligence and misfeasance, would have been discovered and prevented approximately $15,000.00 in Mobile Ballet funds and donations being wasted. 35. Additionally, defendant, Kennedy, intentionally failed to perform her job duties at Mobile Ballet by (1) failing to send timely donor letters to ?nancial supporters; (2) failing to timely prepare and issue press releases advertising Mobile Ballet productions; (3) failing to prepare Nutcracker Charity Ball Photo Books and videos, which Deb families were promised and for which they paid; (4) failing, on multiple occasions, to tell the truth to prominent donors and supporters of Mobile Ballet, thereby damaging its reputation and integrity; (5) failing to provide Mobile Ballet detailed ?nancial information for board meetings and at -29- other times when she was requested by board members to do so; (6) failing to make a timely grant request to the City Of Mobile in the fall of 2016; (7) failing to maintain and develop volunteers to support the activities of Mobile Ballet and the Nutcracker Charity Ball; (8) failing to increase individual donors to Mobile Ballet; (9) failing to mail out season ticket holder renewal requests in a timely manner; among other acts of intentional misconduct. 36. Soon after she became employed at Mobile Ballet, defendant, Kennedy, began a campaign to discredit Winthrop Corey by complaining about him to other Mobile Ballet staff employees and to members of the Mobile Ballet Board. Defendant, Kennedy, refused to allow the Mobile Ballet staff to engage in conversations with Mr. Corey. By such intentional misconduct, defendant, Kennedy, created a toxic work environment at Mobile Ballet?s Mobile of?ce and breached her ?duciary duty to Mobile Ballet. 37. The hostile majority, defendant members of the Mobile Ballet Board of Directors, have intentionally breached their ?duciary duty to act in the best interest of Mobile Ballet by intentionally ignoring defendant, Kennedy?s, repeated and continuing aforesaid intentional misconduct that has brought to Mobile Ballet irreparable and continuing damage. -30- Unlawful Conduct 0f Defendant. Majority Members. Mobile Ballet Board 38. In March 2016, Mr. Corey delivered to defendant, S. Parker, as president of the board, a written, four page, single-spaced list of concerns about speci?c duties that defendant, Kennedy, was not performing and the damaging effects such lack ofperfonnance was causing Mobile Ballet. (See Exhibit A, attached and incorporated by reference in ?Jll herein.) Apparently Exhibit A was shared by Dr. Sandra Parker with defendant, Tate, but never shared with the Mobile Ballet Board as a whole. Some of the matters included in Mr. Corey?s list of concerns were: (1) That the board only hired defendant, Kennedy, as a part time development director, not a managing director; (2) That defendant, Kennedy, was not providing detailed ?nancial information to the board, to Mr. Corey or others who needed such information; instead, defendant, Kennedy, provided only inadequate, ?collapsed? ?nancial information for Mobile Ballet and the Nutcracker Charity Ball cloaked in secrecy; (3) Defendant, Kennedy?s, hiring of her husband to provide photography services to Mobile Ballet and the Nutcracker -31- (4) (5) (6) (7) (8) Charity Ball without competitive bidding was a con?ict of interest; In 2015, Defendant, Kennedy, was late mailing out season ticket renewal letters, Discover Dance ?yers, season ticket flyers, donor letters, which prevented donors being listed in the fall of 2015, Snow White program; In 2015, Defendant, Kennedy, was late mailing out Snow White advertisement post cards, which were not mailed until ?ve days before the ?rst performance; Because of defendant, Kennedy?s, failure to perform her job, the advertising posters for Snow White were late and not even received in the of?ce until four days before the ?rst performance; Defendant, Kennedy, failed to even order bookmarks for the 2015, Snow White performance, when such bookmarks had proven to be one of Mobile Ballet?s best advertising tools; Defendant, Kennedy, refused to allow Mr. Corey to speak to the graphic artist she had employed to provide advertising for Mobile Ballet; -32- (9) Defendant, Kennedy, had refused to allow Mr. Corey to obtain any ?nancial information about Mobile Ballet or the Nutcracker Charity Ball except for the collapsed version of ?nancial information provided to the board; (10) Defendant, Kennedy, has told of?ce staff at Mobile Ballet that they were not to engage in any conversations with Mr. Corey, and to refer any questions from him to her; (1 1) Defendant, Kennedy, failed to produce a Nutcracker Charity Ball Photo Book, although such books were promised and paid for by the Nutcracker Charity Ball Deb families. This failure has cost Mobile Ballet good will in the community. Defendant, Kennedy, has for many months misrepresented to Deb families that the Photo Books were imminently forthcoming. She simply failed to tell the truth. (12) Defendant, Kennedy, has been a discouraging in?uence on volunteer participation in the activities of Mobile Ballet and the Nutcracker Charity Ball. Mr. Corey repeatedly requested a meeting with Dr. Sandra Parker to discuss the contents of Exhibit A. She refused to meet. However, after repeated requests, Dr. -33- Parker met with Mr. Corey but with defendant, Tate, present and conducting the meeting. Defendant, Tate, failed to discuss the substance of Mr. Corey?s concerns contained in Exhibit A and told him that he would just have to get along with defendant, Kennedy. Defendants, Tate and S. Parker, have admitted that they also had several private meetings with Mr. Corey during the spring and summer of 2016 but there is no evidence that they ever discussed the substance of Mr. Corey?s list of concerns. No minutes of these private meetings were ever prepared. 39. The final response of the hostile, defendant board members to Mr. Corey?s concerns was his constructive termination. 40. On August 26, 2016, the so called executive committee of the board, composed of defendants, Tate, S. Parker, Kirby and Burgess, without the authority or knowledge of the Mobile Ballet Board, delivered a letter to Mr. Corey dated August 3, 2016. (See Exhibit B, attached and incorporated by reference in herein.) This letter to Mr. Corey was an unauthorized constructive termination of his employment at Mobile Ballet. The unauthorized letter drastically changed the terms of Mr. Corey?s employment with Mobile Ballet. It offered a change from ?ll] time employment with full bene?ts to part time employment with no bene?ts. In a back handed sort of way, the letter, without truthful basis, criticized Mr. Corey?s choreography, ballet productions and selection of guest artists. The letter -34- also suggested that Mr. Corey would be severely limited in the ?iture to setting his ballets on other companies throughout the country. He had been allowed to do this for thirty years, and to teach in the summers in New York, to earn additional income because Mobile Ballet had never paid him what his broad and immense talents and skills, as more than just an artistic director, were worth. Also, the rental of the costumes used by Mobile Ballet, which were conceived, designed and executed by Mr. Corey, was to be taken away from him and given to the so called managing director, defendant, Kennedy, who did not know anything about the costumes or their inventory. In summary, the unauthorized letter of August 3, by defendants, Tate, S. Parker, Kirby and Burgess, was an unlaw?il effort to constructively terminate Mr. Corey?s employment at Mobile Ballet without the full Board of Director?s knowledge. 41. Mr. Corey?s attorney did not wait twenty-three days to respond to the hostile August 3 letter, but had a response hand delivered at the August 30 board meeting to all attending board members. (See Exhibit attached and incorporated by reference in full herein.) The response pointed out the August 3 letter?s appalling lack of appreciation for Mr. Corey?s thirty years of stunning artistic achievement in Mobile as leader of a non-professional, but highly success?il youth ballet company. The response also focused on the sinister motives of the -3 5- purported signers of the August 3 letter: l) to destroy the ?entente cordial? at Mobile Ballet, (2) to diSplay mean spiritedness towards Mr. Corey, and, (3) to terminate Mr. Corey?s employment at Mobile Ballet. The response warned the board of the crisis of leadership on the board and of the serious non-artistic management problems caused by defendant, Kennedy. In conclusion, the response warned that if the board did not treat Mr. Corey with the utmost respect, that his many supporters would cease their patronage and the board would ?have the egregious distinction of overseeing the demise of Mobile Ballet.? 42. The unauthorized August 3 letter to Mr. Corey and his attorney?s response were the major topic of discussion at the August 30, 2016, board meeting. During the course of the meeting, which was contentious because the August 3 letter to Mr. Corey was sent without board knowledge or authorization, board member Catherine Ashbee said that, ?Winthrop Corey is Mobile Ballet.? Defendant, S. Parker, took exception to the statement and screamed at Ms. Ashbee, ?You can?t say that! Winthrop Corey is not Mobile Ballet! That would be like Sandra Parker saying she was Altapointe.!? Thereafter, plaintiff, Thull, made a motion to withdraw the August 3 letter, which motion enraged defendant, S. Parker. She went on a verbal tirade about Thull?s motion and did not allow a second to the motion. Defendant, S. Parker, in an abuse of lawful process, then -36- abruptly cut off further board discussion about the unlawful August 3 letter and without a motion to adjourn the meeting essentially said, ?This meeting is over. I?m having a glass of wine and then I?m going to New Orleans for dinner.? 43. Mr. Corey?s attorney wrote another letter to the board on September 29, 2016, (attached as Exhibit and incorporated by reference in full herein), pointing out the many unlaw?il activities of defendants, Tate, S. Parker, Kirby, Burgess and Kennedy, and the hostile majority defendant board members, most of which have been outlined above. The letter demanded the immediate resignation from the Mobile Ballet board of defendants, Tate, S. Parker, J. Parker, Kirby and Burgess, and for the immediate termination of defendant, Kennedy. The response to the demand from the board and the said defendants was to ignore it. 44. On September 22, 2016, board member, Marie Grip, wrote a letter to defendant, S. Parker, as board president, calling for the resignation of any person who had anything to do with the unauthorized letter to Mr. Corey and the unauthorized secret meetings with him. (See Exhibit E, attached and incorporated by reference in full herein.) Her demand was ignored. 45. In advance of the special board meeting called for October, 17, 2016, Ms. Grip, wrote another letter to the board and E-mailed it to each board member, expressing her grave concerns about the unlaw?Jl and unauthorized activities of -3 7- the some board members. (See Exhibit F, attached and incorporated by reference in full herein.) Ms. Grip?s letter pointed out many abuses of lawful processes and procedures applicable to an Alabama Non-pro?t Corporation such as Mobile Ballet including, but not limited to: (1) (2) (3) (4) (5) (6) secret unauthorized meetings between the so called executive committee and Winthrop Corey to discuss the terms of his employment, where no minutes were taken; secret unauthorized meetings between defendants. Tate and S. Parker, and Winthrop Corey to discuss the terms of his employment, where no minutes were taken; a few board members without board authority acting as the board in connection with Winthrop Corey?s employment with Mobile Ballet; defendants, Tate, S. Parker, Kirby and Burgess, constructively terminated Winthrop Cory?s employment at Mobile Ballet without board knowledge, approval or prOper authorization; defendant, S. Parker?s and Kennedy?s, initial refusal on September 27, 2016, to provide ?nancial records of Mobile Ballet to board members, Plaintiffs, Thull and Davis, and Catherine Ashbee; the unauthorized appointment of defendant, Kennedy, as managing -3 3- director of Mobile Ballet; (7) failure of the board to have any long or short term strategic planning in place to provide for the needs of Mobile Ballet; (8) failure of the leadership of the Mobile Ballet board, including defendants, Tate, S. Parker, Kirby and Burgess, to acknowledge the existence of Mr. Corey?s four page list of concerns about defendant, Kennedy?s, failure to do her job including their failure to present it to the full board for consideration; (9) failure of the board to enforce any con?ict of interest policy; (10) Ms. Grip had previously called for the resignation or termination of any board member who had participated in the meetings with Mr. Corey or the preparation and signing of the unauthorized August 3, 2016, letter to Mr. Corey. Once again, the defendant board members response to the concerns stated in Ms. Grip?s letter was to ignore them. 46. The further response of the hostile, defendant majority at the Mobile Ballet Board was to call in the Mobile Ballet, Inc. lawyer, Brooks Milling, of Hand Arendall to attend the October 17, 2016, board meeting, present the unauthorized August 3 letter to Mr. Corey for retroactive, unlawful approval by -39- the full board. In a contested and unlaw?il vote, the August 3 letter was approved by the board. The vote was unlawful because of the multiple con?icts of interest among the board members who voted to approve the letter and because new board members, who were also con?icted and had insuf?cient knowledge of the facts, were allowed to vote on the letter. The full board?s contested decision to oust MI. Corey from Mobile Ballet was manifested in their vote to approve the August 3 letter, a vote which was unlawful. Of course, no defendant board members resigned and defendant, Kennedy, was not terminated. 47. In ?thher response, and to leave no doubt that the hostile, defendant majority of the board had decided to terminate Winthrop Corey?s employment at Mobile Ballet, the board at its special meeting to consider defendant, Kennedy?s, job performance on November 17, 2016, in another ludicrous, contested and unlawful vote, voted to give defendant, Kennedy, ajob for life at Mobile Ballet. By their unlawful vote the hostile, defendant board majority made defendant, Kennedy?s employment at Mobile Ballet, untouchable. The decision came in the form of a motion, made by defendant, Burgess, seconded and approved to table any discussion about defendant, Kennedy?s, job performance in the past and to never again in the future bring up for the board?s consideration any issue concerning defendant, Kennedy?s, job performance at Mobile Ballet. The motion -40- passed by an 8 to 7 vote with defendant, Corte, who was not even a lawful member of the board casting the deciding vote in favor. Thus, the fate of Winthrop Corey at Mobile Ballet, who all acknowledge has been - Mobile Ballet - for thirty years, was sealed and his sad, unlawful ouster - complete. 48. The Mobile Ballet special board meeting on November 17, 2016, was a further speci?c example of breach of ?duciary duty by the hostile majority defendant board members. The meeting was conducted by defendant, S. Parker, who incredibly read a list of points commending defendant, Kennedy, and her job performance to the board before it took its votes on her continued employment with Mobile Ballet. The astonishing statements by defendant, S. Parker, during this meeting prove her incompetence to be a member of the Mobile Ballet board, much less its president, and her intentional breach of ?duciary duty to Mobile Ballet. As she was reading the list of written commendations about defendant, Kennedy, to the entire board, she made the following self?incriminating statements: ?What does Karen mean here? [looking at the written document which defendant, S. Parker, held in her hand and was reading] I have to get Karen here to help me. I don?t have time for all of this.? Defendant, S. Parker, had not made any independent judgment in Mobile Ballet?s -41- best interest about defendant, Kennedy?s, job performance. Instead, she asked defendant, Kennedy, to write out her own assessment of her own job performance, which defendant, S. Parker, fraudulently presented and read to the board as her own opinion of defendant, Kennedy?s, job performance. Such a false representation by defendant, S. Parker, to the Mobile Ballet Board is ?irther compelling evidence of her incompetence, failure to act in the best interest of Mobile Ballet and her intentional breach of ?duciary duty to MobileBallet. Not surprisingly, no minutes have been produced from the August 30, October 17 or November 15, 2016, board meetings, which itself is a violation of Alabama Law. 49. Almost immediately after the November 17, 2016, board meeting, discussions began between the board and Mr. Corey over a severance package, which turned out to be woe?illy inadequate in consideration of all that Mr. Corey had accomplished and done for Mobile Ballet for thirty years. Mr. Corey was forced to accept the best, but paltry, severance package offered by the hostile controlling defendant members of the Mobile Ballet Board Of Directors. Social media and the local press have been swamped with outpourings of support and appreciation for Mr. Corey from ballet patrons, present and former dancers, guest artists and others. Mr. Corey?s ?nal day of employment at Mobile Ballet was December 11, 2016, after the last performance of The Nutcracker. The .42- performance was to a sold out Mobile Civic Theater and a gloriously appreciative audience paying their respect and homage to Winthrop Corey for his thirty years of creating ballet magic and wonder and changing lives at Mobile Ballet and in the Mobile Community. 50. The best evidence of the abject, unfettered hostile motives of the majority of the Mobile Ballet Board of Directors towards Winthrop Corey, is that they have changed the locks and placed an alarm system on the Mobile Ballet School building that bears his name and have barred him from the premises except in the company of a Mobile Ballet staff employee. On January 4, 2016, in the company of several persons, defendant, Kennedy, screamed at employees that Winthrop Corey was not to be allowed inside the building that bears his name without defendant, Kennedy?s, knowledge. She also screamed that under no circumstances was Mr. Corey to be allowed in the costume area of the building that bears his name, although defendant, S. Parker, had previously authorized him in writing to oversee three costume rentals scheduled to occur during the next few months. Though they may allege otherwise, the contempt of the defendant, hostile majority of the Mobile Ballet Board toward Winthrop Corey apparently has no bound. 51. The, defendants, the hostile majority of the Mobile Ballet Board of -43- Directors, and defendant, Kennedy, have intentionally done irreparable and continuing damage to Mobile Ballet, Inc. Defendants, Tate, S. Parker, Kirby and Burgess, knew that their August 3, 2016, letter delivered to Mr. Corey on August 26, 2016, contained such onerous, drastically new employment terms that it constituted a constructive termination of Mr. Corey?s employment. The hostile majority board defendants also knew when they voted at the October 17, 2016, board meeting to ratify the August 3 letter, that they were voting for Mr. Corey?s constructive termination. Incredibly, when they took such reckless action, the defendant hostile board members had no plan to replace Mr. Corey. They had no plan to even have a permanent artistic director at Mobile Ballet. Defendant, Kennedy?s, self dealing, con?icts of interest and general lack of competence have caused Mobile Ballet serious ?nancial loss while bringing defendant, Kennedy, and her husband substantial ?nancial gain. All the while, the defendant, hostile majority board members have stood idly by and done nothing to curb defendant, Kennedy?s, unlawful conduct. Defendants? actions were reckless and intentional breaches of their ?duciary duty to Mobile Ballet. 52. The defendants have acted, individually and in conspiracy, to intentionally and recklessly breach their ?duciary duty to Mobile, Ballet, Inc. The future of classical ballet in Mobile as we have known it for thirty years is in peril. -44- By their hubris and intentional, reckless, oppressive, unlawful actions, defendants have set in motion a fatal downward spiral that, left unchecked, will result in Mobile Ballet?s destruction. The Legal Duties Owed By The Directors And Of?cers To Mobile Ballet 53. Non-pro?t corporations in Alabama are governed by the Code of Alabama 10-3A?l, et seq., general corporate law and fundamental equitable principals of jurisprudence recognized by Alabama Courts and by their Articles of Incorporation and By?laws. Additionally, the Alabama Association of Non-pro?t Corporations, has adOpted standards of excellence that, though not binding, provide a foundation for the management, governance, and operation of non-pro?ts that embraces fundamental values such as honesty, integrity, fairness, respect, trust, compassion, responsibility and transparence. Signi?cantly, defendant, Kennedy, but not Mobile Ballet as an organization, is a member of AAN. 54. Corporate directors and of?cers of a non-pro?t corporation, such as the defendants herein, owe the corporations they serve the ?duciary duties of loyalty and due care. The duty of loyalty prohibits faithlessness and self dealing. The duty of care requires of?cers and directors to act as ordinarily prudent men -45- under similar circumstances. Stated in other words, such directors and of?cers owe the corporation their independent best judgment to act on behalf, and in the best interest of, the corporation without undue in?uence from third parties or con?icts of interest or self dealing. Directors and of?cers are forbidden to engage in illegal, Oppressive or ?audulent activities. Code of Alabama 10A-3- (2015). They also are forbidden from misapplying or wasting the assets of the non-pro?t corporation. Code of Alabama (2015). Such forbidden conduct by the directors and of?cers of a non-pro?t Corporation provides the requisite factual basis for a circuit court to liquidate the assets and affairs of a non-pro?t corporation. 55. The derivative action is the prOper legal procedure to enforce the right of a non?pro?t corporation, because those in control of the non-pro?t corporation have failed to assert the right or rights on behalf of the corporation and by their failure, damaged the corporation. Often times, as in this case, the hostile, majority board members fail to assert the corporation?s rights because they have breached their ?duciary duty to the corporation, have engaged in illegal, oppressive or fraudulent behavior and refuse to prosecute the corporation?s claim against themselves. ?46- COUNT ONE (Intentional Breach of Fiduciary Duty) 56. The avertnents contained in paragraphs 1 through 55 hereinabove are incorporated by reference and included as though they were set forth in full herein. 5 7. By Exhibits A, D, and referenced hereinabove, and during the discussions made at the board meetings on August 30, October 17 and November 15, 2016, with the defendant, hostile, majority board members, plaintiffs have made demand upon said defendants to take the corrective actions and relief set forth in the prayer for relief in this matter. 58. Said defendants refused plaintiffs? repeated demands and refused to take or implement the relief, which plaintiffs requested in the best interest of Mobile Ballet. 5 9. The defendants are each guilty of individual, intentional breaches of their ?duciary duty to Mobile Ballet. 60. The business, ?nances, good will and reputation in the Mobile Community of Mobile Ballet have all been irreparably damaged by reason of each defendant?s intentional breaches of ?duciary duty to Mobile Ballet. 61. Defendant, Kennedy, and her husband have realized pro?ts of at least $100,000.00 since 2012, as a proximate result of the said defendants individual -47- breaches of ?duciary duty to Mobile Ballet. 62. The lawful processes and procedures of Mobile Ballet and its ?nances, in an amount unknown at this time but to be determined, have been irreparably damaged as a proximate result of the said defendant?s individual breaches of ?duciary duty to Mobile Ballet. COUNT TWO (Conspiracy To Intentionally Breach Fiduciary Duty) 63. The averments contained in paragraphs 1 through 62 hereinabove are incorporated by reference and included as though they were set forth in ?ill herein. 64. By Exhibits A, C, D, and F, referenced hereinabove, and during the discussions made at the board meetings on August 30, October 17 and November 15, 2016, with the defendant, hostile, majority board members, plaintiffs have made demand upon said defendants to take the corrective actions and relief set forth in the prayer for relief in this matter. 65. Said defendants combined and conspired to refuse plaintiffs? demands to take or to implement the relief, which plaintiffs requested in the best interest of Mobile Ballet. 66. The defendants are each guilty of combining and conspiring, to breach their ?duciary duty to Mobile Ballet. -4g_ 67. The business, ?nances, good will and reputation in the Mobile Community of Mobile Ballet have all been damaged by reason of said defendants? conspiracy to intentionally breach their ?duciary duty to Mobile Ballet. 68. As a direct and proximate result of said defendants? conspiracy, defendant, Kennedy, and her husband have realized pro?ts of at least $100,000.00 since 2012, as a proximate result of the said defendants? conspiracy and breach of ?duciary duty to Mobile Ballet. 69. The lawful processes and procedures of Mobile Ballet and its ?nances, in an amount unknown at this time but to be determined, and its good will and reputation in the Mobile community have been irreparably damaged as a proximate result of the said defendant?s conSpiracy to breach their ?duciary duty to Mobile Ballet. SUMMATION AND PRAYER FOR RELIEF 70. The elegant, dashing and brilliant clipper ship, which has been Mobile Ballet for thirty years, is being systematically scuttled by the on-going breach of ?duciary duty and conspiracy to do so of the defendants, who know not what they do. This proud ship is foundering and is in immediate danger of sinking under the waves of the defendants? hubris and their disdain and contempt for the lawful processes and procedures of a non-pro?t corporation operated with -49- honesty, transparency and integrity. This derivative lawsuit is plaintiffs? urgent lifeline to the court to save Mobile Ballet and prevent its destruction. PRAYER FOR RELIEF: WHEREFORE, the premises considered, plaintiffs pray for an order granting Mobile Ballet, Inc. the following relief: That, the court order an immediate evidentiary hearing and after taking evidence, that the court issue a temporary restraining order followed by a permanent injunction providing; That, the present board of directors of Mobile Ballet, Inc. be dissolved or liquidated and that a new receivership board pendite lite be appointed as an interim board of directors to act in the best interest of Mobile Ballet to manage and Operate Mobile Ballet until, with court supervision and direction, a new permanent board of directors can be installed; That, the employment of the present so called managing director and development director, Karen Kennedy, be terminated and replaced by an interim managing director and artistic director, pendite lite; That, damages be awarded against the defendant, Kennedy, in an amount to be determined in favor of Mobile Ballet, Inc. and against said defendant, Kennedy; That, an order be entered prohibiting the defendants from using any funds of -50- the Mobile Ballet to defend themselves against this lawsuit from their intentional, unlawful, oppressive, fraudulent conduct; 'l'hat, attorney?s fees be awarded to plaintiff and against the defendants jointly and. severally; and: That, plaintiffs and Mobile Ballet Inc. have such. other and further I'eliei?as may be fair, lawful and just in the premiees. Respectfully submitted, Rail! M. Thompson Ray M. Thompson (ill-10058) Attorney For Plaintiffs P. O. Box 81.177 Mobile, Alabama 36689-1 I77 Telephone: ('25 1) 432-0055 E?Mail: mam ti: . net. Veri?cation STATE OF ALABAMA: COUNTY 013 MOBILE: Appeared before me. the undersigned Notary Public, Beverly Davis, who after being placed under oath did depose and say the following: My name. is Beverly Davis. I live in the. City 01" Mobile and my address is 51 Kingsway, Mobile Alabama 36608. I have been a. patron and supporter of Mobile Ballet for thirty years and have been on its Board ofDirectors for more than twenty years. have. also perform-ted in character roles in. Mobile Ballet productions for many years. .1 have reviewed the averments set forth in the complaint and based on my experience at Mobile Ballet?s as a board a'tember, performer; patron and supporter I have first hand knowledge that the said averments are true and correct. THE DEPONENT SAYETH Beverly Des-"is Sworn tzo and subscribed. before me ay ol?january, 2017 7a a a Notary Public My Commission expires: 5/02 Cr {7 fl" ){gi?l - ?35irL. -!-1111? 5) I. I I Exhibit A Title; Director of Development vs Managing Director Under the Presidency of Dr. John Sands, it was agreed that Karen Kennedy would assume the position of Director of Development. A job description was developed and annual reviews were to take place. I am unclear when her title changed, when this was voted upon or what the description of the position of Managing Director is, nor am I clear on accountability. Reviews and accountability measures were to be put into place years ago following an embezzlement by a former employee. Budget; When Karen was hired, she, and Liz Ramey from our payroll service (and acting bookkeeper) and I sat for hours to get our budget in line with the way our tax return was set up. We examined every penny in detail in order to come up with an annual budget. Our company is broken into four categories, (1.) Administration, (2.)Nutcracker Charity Ball, (3.) Production and (4.) School. Since that time, I have submitted an annual production budget. My involvement was not requested with the administration, NCB, or the school. I don't believe that either Noel or Zoe were consulted as to the ?nancial needs of the school as needs such as equipment, CD's used to teach classes, etc. have not been addressed. The Ball information seems to be a closely guarded secret. Neither Jill nor the decorating committee has ever been given a budget. When I have requested a working budget on the ball, I receive no reply. The Board of Directors is presented with a "collapsed" version of the Mobile Ballet?s annual budget without many details. I worry this puts us at ?nancial risk since there is no ?nance committee in place to review the line items. Policy When Karen was hired she informed me that if anyone was going to be hired to do any major projects that three bids would be required. This would include things such as a cleaning service, any repairs and maintenance or property improvements. Bids are presented to the proper committee, or board if needed, for approval. In the past, A photographers took pictures of the school, Mehrdad Vaghe? volunteered his time to take pictures of the company and productions. I believe that photographers for the ball were hired by the Chairmen. For several years now, Jeff Kennedy is the photographer for school photos, performance photos, the Nutcracker Charity Ball and photo shoots of our dancers. Jeff does a greatjob, but I am unaware of other bids being presented. I have concerns since it is my job to approve all company photographs, I would have liked input in the process of choosing a photographer. Taking photos of debutants standing in a gown is far different than shooing live dancers in a performance. Although I have been asked to sign checks for his photography, I have no idea if his prices are competitive or what rights they include. I would feel more comfortable if I could review the other bids and know that they were approved by the board or executive committee. Also, I am told a letter went out on Mobile Ballet letterhead last year encouraging families to purchase photos directly from eff and signed by Karen. I am told that some families viewed this as a con?ict of interest. Timeline For the past 25 years we have operated with a timeline for various operations. Let me preface this by saying that this timeline was presented to Karen when she was hired to be on Unfortunately there have been many times when we were late on many thhe items listed below. In May, we are to mail out a season ticket renewal letter to current season ticket holders and mail out a Discover Dance ?yer to teachers on our mailing list announcing our next season. EarlyAagust, we are to mail out our Season Ticket ?yer to our general mailing list Early September, we mail out our Donor Letter to current donors asking for them to renew their pledge. A separate letter goes to our general mailing list asking for donations. It is important that we follow this timeline to insure their names get in our ?rst program either in late October or early November. We have had our posters, bookmarks and postcards ready three weeks before each performance. That is the time we usually start our print advertising as well. Corporate solicitations, we follow a calendar that we developed according to their giving cycles. This season alone, our season ticket materials were late going I understand this, because of the delay with Dance Theater of Harlem. However, the postcards for Snow White were mailed out 5 business days before the ?rst performance, and our poster for this production arrived in the of?ce 4 days before the production. There were no bookmarks, which has been proven to be our best advertising tool. The donor letters, both for renewals and new donors, were not mailed out until the end of October, making it impossible to get their names in the program for Snow White. When questioned about this I was told that their names would appear in the Nutcracker program. It has always been my policy to sign a thank you letter to a donor and have it mailed within three days of receiving the donation. I received a stack of thank you letters in late January thanking these individuals for their donations in November! I do understand that from October through December it is an extremely busy time for our staff. I also believe that if some of these tasks were delegated to our staff we would not be missing some of these important deadlines. The staff of Mobile Ballet no longer works as a team. There is little, if any delegation, which is why deadlines are missed. Another example of ineffective management is that I am not allowed to speak with our graphic artist, Tim, who lives in Montgomery. I have ?nal approval of all production materials that go out, yet I have been told repeatedly that Tim only wants to deal with one person. Rather than I dealing with Tim directly, Karen gives Tim my ideas, Tim comes up with a proof that is sent to Karen. If I do not approve, I ?my to articulate my ideas to Karen who in turns interprets them to the artist. Then another proof is sent and I either approve it or send it back. It is such a cumbersome process and has made us late many times in getting these material out to advertise our productions. I would prefer to have a graphic artist who lives in Mobile and that I could meet with personally. I enjoy working directly with an artist as we tend to bounce ideas off one another. This would also save a great deal of time and frustration for the graphic artist. I asked our ?rst bookkeeper, Ed, who Karen hired, three times for budget information about a production. Karen informed me that I should not ask Ed for any ?nancial information. When I questioned Karen about this she said simply that he works for her and I was to get what I needed from her. I told her that during my tenue at Mobile Ballet we all worked as a team for the success and growth of the organization. Karen replied that Ed answers to her. Karen has since told the current of?ce staff that they are not to engage in conversations with me, and if I asked for any information to please give it to her to discuss with me. I know you are aware of this, but we need to address the tardiness in getting a ball book and DVD to our deb families in a reasonable amount of time. I believe the last book that was produced was for the 2011 ball, and the last DVD sent out was for the 2012 ball. This has cost us a lot of goodwill in the community and I know of two Debs that did not participate this year because their mother?s are very imitated that promises were not kept for their older sisters debutante ball. This is a direct re?ection on Mobile Ballet and on the ball. When I questioned Karen about this and told her I thought this was not good customer service, she said she had a proof for a book but did not tell me which ball it was for, nor when she anticipated it being mailed out. This was several months ago. Books are no longer offered. It was one of our best selling tools. I understand the Mobile Carnival Association is now offering a book. Volunteers have asked to help with both the book and and were told that it is a staff function. Karen has had the past for over a year. They have not gone out. We don't seem to follow through with what we say we are going to do. Both the book and the DVD were included in the fees the debutants paid in the past. I am told that a book was not offered this year, yet we paid quite a bit for a photographer to take pictures at all the events surrounding the ball. I believe one reason Mobile Ballet has experienced the success we have through the years was reaching out to those in the community and getting them involved. They felt ownership. Their involvement brought in students, donations, and many talented people giving their time for the betterment of the organization. It was an exciting time! Thank?illy, Mobile Ballet has grown to such an extent that it is too large for one person to handle everything that needs attending to. The original intent of the development director was to assist me in the day to day operations so I could focus on the artistic aspects of the company. The director was to be an extension of, not a replacement of, the artistic director. Much as the CEO of a company has a management team, I was to have a partner to assist in making the school, productions and ball more of a community outreach. My fear is that we are at a tipping point. Community volunteers and leaders are no longer encouraged or seem to be welcome in investing in Mobile Ballet. Our contributions and grants are down. I have no idea how pro?table the ball was and no idea if tax information went out to those that made tangible donations. I am told the environment is one of secrets. Please help me turn this situation into a positive one for the company and for our community! Exhibit August 3, 2016 Winthrop Corey Artistic Director, Mobile Ballet Dear Mr. Corey: a Heighten the caliber of our guest artists, including an increased focus on recruiting new, talented dancers to our productions. a To ful?ll the expectations of today?s audience, we need to offer vibrant, enticing productions ?lled with new, exciting choreography, while increasing the length of time between recycling previous productions. 9 Based on your limited work hours, we need to discuss shifting your employment from a full- time, salaried position with bene?ts to a part-time or contract based arrangement. a All future rentals of Mobile Ballet property, including but not limited to costumes, props, and set decorations, shall be overseen by the Managing Director. We look forward to discussing these items with you and working to strengthen our organization. Sincerely, Sandra Parker, President, Mobile Ballet Board of Directors Elizabeth Kirby, Vice President, Mobile Ballet Board of Directors Chris Burgess, Secretary/Treasurer, Mobile Ballet Board of Directors Exhibit Ray M. Thompson Attorney Law RD. Box 81177 Mobile, Alabama 36689-1177 (251) 432-0055 Fax (251) 432?2772 E?mail: sea itch?bellsouthmet August 30, 2016 Mobile Ballet, Inc. BY HAND DELIVERY 4351 Downtowner L00p North Mobile, Alabama 36609 Attention: The Board Of Directors Re: Mr. Winthrop Corey Dear Board Members: operations, which have resulted 111 consistently stunning artistic achievement through Visually spectacular on-stage productions and dance training excellence that has seen many of our dancers go on to dance careers with leading ballet Mobile Ballet, Inc. August 30, 2016 Page 2. companies and schools across the comtry. Two years ago, he was personally invited to participate in a by?invitation?only, week long ballet teacher training artistic management problems, it will have the egregious distinctioa of overseeing the demise of Mobile Ballet. yam-s very trulyIfElf?M"? g: i/Ray my. Thompson tar/attachment Exhibit Ray M. Thompson Attorney At Law P.0. Box 81177 Mobile, Alabama 36689-1177 (251) 432-0055 Fax (251) 432?2772 E-mail: September 29, 2016 Mobile Ballet, Inc. 4351 Downtowner Loop North Mobile, Alabama 36609 Attention: The Board Of Directors Re: Mobile Ballet Board - Breach Of Fiduciary Duty, Negligence Dear Board Members: Under Alabama Law, the Board ofDirectors, and that means the entire Board at duly constituted meetings, is the group of persons vested with the management of the affairs of the non?profit corporation. One member cannot act as the Board. A group of members cannot act as the Board. An employee cannot act as the Board. There are wise policy reasons that this is so. The full discussion, exchange of ideas, give and take and even disagreements at duly constituted Board meetings allow all members to fully participate in the discussion and decision making process. This assures that Board decisions are crafted on the basis of the collective wisdom of the entire Board. In this way, the Board ful?lls its ?duciary obligations to Mobile Ballet with the result that Board decisions are transparent and made in the best interest of the organization. The Code of Alabama of the Alabama Non~prof1t Corporation Act, entitled ?Books and Records,? provides, in part, that All books and records of a corporation may be inspected by any member,.director or officer, or agent or attorney, for any proper purpose at any reasonable time.? Ms. Karen Kennedy has on more than one occasion told the bookkeeper to re?lse to give Mr. Winthrop Corey, Artistic Director, access to budget or ?nancial records of Mobile Ballet. As recently as September 27, 2016, Ms. Kennedy and Dr. Sandra Parker initially refused to give Board member, Monty Thull, ?nancial records for the ballet kept on Quick Books. After persisting with his request, and after Dr. Parker consulted with a lawyer, Ms. Kennedy gave M. Thull the requested records. The initial Mobile Ballet, Inc. September 29, 2016 Page 2. refusal, by Board President, Dr. Sandra Parker, in concert with Ms. Kennedy, to give Mr. Thull the requested ballet ?nancial records was unlawful. A crisis of leadership exists on the Board of Directors of the Mobile Ballet, and it begins and ends with the Board?s dealings with Karen Kennedy. She has been allowed to engage in self dealing and wasting thousands of dollars of ballet funds through expenditures not needed by the ballet and not authorized by the Board. She has been supported in her unlawful actions by a minority of members on the Board including Ms. Becky Tate, Dr. Sandra Parker, Ms. Liz Kirby and Mr. Chris Burgess. These members and Ms. Kennedy have been, and are, acting in violation of the Alabama Nonprofit Corporation Act, and the Articles of Incorporation and By Laws of Mobile Ballet. In breach of their ?duciary duty, these members and Ms. Kennedy have been acting as the Board without authorization ??om the Board to do so. A brief review of history is in order to show the unlawful - ultra virus - activities of Ms. Kennedy and the aforementioned Board members.I Ms. Kennedy was originally hired as a part time development director. But unlawful ultra vii-es activities by Ms. Kennedy and her Board supporters began very soon after her hire. Without Board consideration, approval or authorization at a duly constituted Board meeting, Ms. Kennedy was given the title and position of full time managing director. This was unlawful. Soon thereafter, it appears that through unlawful secret meetings between Ms. Kennedy, Ms. Tate and later Dr. Sandra Parker and the so called Executive Committee, this group began acting as the Board, without authorization by the Board to do so. The most recent example of such unlaw?il activity was the appalling and unauthorized letter dated August 3, 2016, to Mr. Corey. The unlawful actions of Dr. Sandra Parker, Ms. Tate and Ms. Kennedy, with acquiescence of the so called Executive Committee, have violated, and continue to ?Ultra Viresi? is a Latin, legal term that is applied to describe unlawful corporate activity and means, unauthorized or beyond the scope of power allowed or granted by a corporate charter or by law. Mobile Ballet, Inc. September 29, 2.016 Page 3. violate, Alabama Law and the Mobile Ballet By Laws. Such unlawful actions have caused Mobile Ballet great damage. The damage is ?nancial. The damage is the loss of - entenre cordiale - within the Mobile Ballet family and organization. The damage is the marginalization and greatly diminished function and presence of the Mobile Ballet cadre of volunteers. The effect of the diminished volunteer presence, particularly as concerns the Nutcracker Charity Ball, is that necessary work is either not done at all or is not done in a timely way. For example, the Nutcracker Charity Ball Photograph Books for the last several years have not been produced as promised, although Deb families have paid for them. Further, the damage is the loss of integrity, the impairment of Board processes and function and the potential loss of standing and reputation of the ballet in the community. Almost immediately after Ms. Kennedy was illegally given the title and position of managing director - ultra vires and she took control over the ballet?s ?nances, procedures changed. She brought an atmosphere of secrecy and deception over the ballet?s ?nances. The Board?s Finance Committee ceased to ?mction. Ms. Kennedy took command of everything financial at Mobile Ballet. She prepared budgets for the ballet and the Nutcracker Charity Ball, which lacked the detail necessary for the Board to provide fiduciary, ?nancial oversight. To hide her self dealing and unauthorized spending of ballet funds and to hide the fact that she was not doing herjob, Ms. Kennedy deceived the Board. Before her hire, the Board routinely received detailed, line item budget and financial statements for their review and oversight. Not until September 27, when Mr. Thull received the Quick Books financial records dating back to the beginning of Ms. Kennedy?s employment had full, complete ?nancial records been made available to a Board member. Such detailed records are essential for the transparency required for the Board to know where every penny of ballet money was spent and to provide proper, lawful, fiduciary, financial oversight. Once in control of the finances, Ms. Kennedy began to provide ?collapsed? budget documents and financial reports that made it impossible for the Board to see where the money was being spent. The question must be asked, why does she insist on operating in secrecy? The only conclusion is that it allows Ms. Kennedy to hide her self dealing and her spending of thousands of dollars of ballet funds for Mobile Ballet, Inc. September 29, 2016 Page 4. services and activities not bene?cial to the ballet, and without Board authorization, and it allows her to hide the fact that she is not doing her job. As an example of Ms. Kennedy not doing herjob, she has overseen the continued pay out of over $12,000 in Angelina Ballerina license fees for rights that the ballet has not needed or utilized since 2014. She was told at least two years ago that the Angelina Ballerina program would not continue and she was asked then to cancel the program. But she failed to cancel the program and the ballet continues to pay, over two years later, these unneeded fees. If Ms. Kennedy had been doing her job and if she and her Board supporters had supplied the full Board with detailed ?nancial records, which was their ?duciary duty, these monies would not have been wasted. A blatant con?ict of interest exists between Ms. Kennedy and her husband?s photography services. She has repeatedly ordered her husband?s services for social events and purposes for which the ballet never historically required or ordered professional photography services. These services were unneeded by the ballet and could have easily been replicated with a digital camera in the hands of a dedicated volunteer for legitimate ballet purposes. Ms. Kennedy required three bids for all ballet contracts with third parties. But did she apply those same rules when ordering photography services from her husband? Over the last four years, Ms. Kennedy has engaged her husband for thousands of dollars of unneeded professional photography services that were not required by the ballet nor authorized by the Board. In the most recent tax year of 2015, Mobile Ballet sent a Form 1099 to the Internal Revenue Service for $1 8,3 04.17 paid to Jeff Kennedy. Mr. Kennedy?s 1099 for 2014 from the ballet indicated payments to him of $14,761.80. How many Board members knew about these payments to Mr. Kennedy? How many Board members authorized these payments? How many Board members even know what services were provided? In breach of their ?duciary duty, some Board members, and Karen Kennedy, have allowed her husband to charge the ballet for unneeded photography services including services that were not charged when A Photography handled both the Nutcracker Charity Ball and ballet student photographs in the Mobile and Eastern Shore Schools. The members of the Mobile Ballet Board are potentially exposed to legal liability and damages to the ballet for Mobile Ballet, Inc. September 29, 2016 Page 5. a claim for breach of ?duciary duty or negligence, or both, for allowing Ms. Kennedy to engage in a continuing con?ict of interest, self dealing and wasting of the ballet?s assets- Ms. Kennedy has, without Board authorization, secretly spent ballet funds on herself outside her sphere of responsibility, for reasons that did not promote the best interest of the ballet. The most recent example was her trip to New Orleans earlier this year, with her husband, to see a ballet performance. She stayed at the Windsor Court Hotel and charged the ballet for more than one?half of the hotel bill, in addition to mileage and meals. She is not the artistic director of Mobile Ballet. So her attendance at the New Orleans performance was outside the scope of her responsibilities and provided no bene?t to Mobile Ballet. The best'evidence that Ms. Kennedy knew that the charges for her New Orleans trip were inappropriate and not in the ballet?s interest is the fact that she tried to hide the trip with her reimbursement request and that she had the check back dated. The full details of this transaction were first made known September 27 when Mr. Thull obtained the full Quick Books financial records. The reimbursement check in question, No. 185 34 was requested by Ms. Kennedy in August 2016, but back dated to June 30, 2016, so it would show up in the previous ?scal year?s ?nancial records and make it more difficult for the Board to discover or ask questions. The request included hotel and mileage/parking reimbursement. But nowhere in the Quick Books records does Ms. Kennedy?s reimbursement request indicate that it included a trip to New Orleans or a stay at the Windsor Court Hotel. Ms. Kennedy has taken similar unnecessary trips at ballet expense. Too often, she has put her personal self interest before the best interest of Mobile Ballet. The only way to restore lawful authority to the Mobile Ballet Board of Directors is for Dr. Sandra Parker, Dr. Jim Parker, Ms. Becky Tate, Ms. Liz Kirby and Mr. Chris Burgess to immediately resign ?'orn the Board. The only way to stop the damage and restore financial integrity to the Mobile Ballet and to allow the Board to ful?ll its ?duciary duty to provide financial oversight for the ballet is for Ms. Karen Kennedy?s employment to be terminated. Mobile Ballet, Inc. September 29, 2016 Page 6. These are dif?cult and critical issues for the Board to resolve. But a thirty year legacy, and more importantly, the future of Mobile Ballet hangs in the balance. The steps outlined are necessary, and only the beginning, to restore the lawful processes, authority and function of the Mobile Ballet Board. These steps are essential for Mobile Ballet to restore its integrity and to prosper and to continue to provide generations of young people with exceptional dance training and to provide our community with the wonder and magic of ballet. fl?urs very trulyThompson Exhibit 3410 Audubon Sq Mobile AL 36695 Dr. Sandra Parker 307 Cameron Ct. Daphne AL 36526 September 22, 2016 Dear Sandra: As a result of the recent executive session and the distribution of the letter to Wink, it became evident that the officers of the board have taken actions that are in direct violation of Mobile Ballet?s own bylaws and which conflict with accepted standards for non-profit boards. As none of us acts in the capacity of a member of the board outside of official board meetings or authorized committee meetings, I write this as a longtime Mobile Ballet supporter and volunteer. i have, however, received extensive training in effective and acceptable board practices from the National Catholic Education Association while serving as a board member and board president in the local Catholic school system. I have also referenced the Standards for Excellence ofthe Alabama Association of Nonprofits. The most serious issues are these: 1.) The officers (and immediate past president) have, as acknowledged in the letter to Wink, held a number of meetings with him, none of which was brought to the attention of the full Board. 2.) As a result of those meetings, the officers attempted to set policies and make demands which are solely the result of their own opinions and preferences. 3.) There was no vote by the board when the staff member hired as development director assumed the title of managing director. 4.) The bylaws of Mobile Ballet, lnc., include no provision for an Executive Committee; therefore, it is clear that any actions attempted by the so?called executive committee are null and void, and are instead unsanctioned actions by a faction ofthe board. The unauthorized actions ofthe officers of the board can be described as ?ultra vires? ("beyond the powers?) in violation of our legally binding bylaws. Such actions indicate a failure to fulfill fiduciary responsibilities and can leave those individual board members open to legal action, as their conduct could be construed as causing damage to Mobile Ballet, lnc. There are other serious issues which indicate both a failure to conform to the Standards of Excellence ofthe Alabama Association of Nonprofits and a negligence with regard to basic duties of non?profit boards: 1.) There is no strategic plan in place, despite the fact that Mobile Ballet would be facing a major transition in the coming years. 2.) There is no organizational chart. 3.) There has been no annual evaluation process in place to assess senior staff performance. 4.) The board lacks racial diversity and there has been a tendency to select new board members from a narrow segment of the community. A letter written in March by the Artistic Director to the board president voicing a number of concerns was ignored and never brought to the board. The aforementioned violations and lack of attention to the proper duties of the leadership of a nonprofit board are serious and indicate either profound ignorance of effective board procedures and the legalities involved, or arrogance on the part of the involved board members. This is damaging to Mobile Ballet, lnc., as a whole, and dismissive ofthe other board members. The fact is that the Mobile Arts community is a small, closely-knit one, and Mobile Ballet?s Artistic Director has along history here. It is a virtual certainty that rumors of discord will circulate and likely reach publications that have an interest in such things. It is disturbing that a few board members, acting on their own and without authority and with disregard for their proper duties and responsibilities to the organization have caused a crisis in leadership and lost the confidence of a significant number of fellow board members. Therefore, the only honorable course ofaction for those board officers and any other board members involved in the meetings with Wink and the preparation and signing of the letter resign before more damage is done. Sincerely, Marie 5. Grip Exhibit 1! ANN ttvlail News Sports Finance Weather Entertainment Mobile U?verae 311.com More En Espa?oi All Search Search Mail Search Web Home Ray a i Compose Search results 4! a Archive i] @Eeliaps?llDefte} a Spar More mm, (31) Fwd: Special board meeting Braits {150} 5 Marie Grip Jan 6 at t1:Thompson Archive Ra $34.98 Spam {497} Rainbeau Eurves This email, and the accompanying document, :5 what I worked up months Emma": if?ews ago to try to convince the other board members of the folly of the officers. . No dice. hope It touches on some of the spectfic transgressions about smportant which you need info. Unread Starred Marie People Forwarded message 5006'! From: Marie Grip Shopping Date: Sun, Oct 16, 2016 at 8:37 PM Travel Subject: Special board meeting To: Sandra Parker , , "leslie.Iohnsont?ishirecom' om "libbalvontc?aolcom" "ivhatzuodoxti?aolcom? (whatzuodoxti?antcorn>, "Lfrinooldfc'?omailcom" , "cercat?f?livecom" Dear fellow board members: I am unable to be at Monday's important meeting, as I will be in Tennessee babysitting my grandsons. know that we all have a lot on our plates and no one likes facing up to unpleasant situations. Believe me, no one hates confrontation and controversy more than l, but sometimes we have to live up to our commitments and do dif?cult things. For most of our adult lives, my husband and have served on nonpro?t boards and special planning committees as members, committee chairs and presidents: our older daughter is a nonpro?t consultant with an advanced degree in nonpro?t management. Through sad experience, we have all learned that nonpro?ts are especially vulnerable entities. as most people involved with them tend towards altruism and selflessness; we want to think the best of others associated with the organization. and tend to shy away from confronting misdeeds. But, as members of a board of directors. we have a ?duciary duty that encompasses far more than simply watching the bottom line. We now find ourselves in circumstances where Mobile Ballet's board leadership has fallen short with regard to the required "duty of care, duty of loyalty, and duty of obedience". lt is the "duty of obedience" {to laws and guiding principles] that is most problematic. This re?ects badly on the organizationmust do everything necessary to take corrective action; the price is high if we do not. I urge you to give thoughtful consideration to the attached document which highlights violations of the Alabama State Code. our own binding bylaws, and the Standards for Excellence of the Alabama Association of Nonprofits. Thank you. Marie 5. Grip As a 501(c)(3) nonprofit organization, Mobile Ballet enjoys certain privileges. Along with those privileges come requirements and responsibilities with regard to state law and our own binding bylaws. We must also make every effort to adhere to the Standards for Excellence of the Alabama Association of Nonprofits, which clearly enunciates the ?best practices? expected of nonprofit corporations in the state of Alabama. As stated in the letter to Winthrop Corey dated, August 3, 2016, the ?Executive Committee? (officers of the board of Mobile Ballet) met a number of times with him; the president and immediate past president also met with him separately. As a result of these meetings, a number of expectations and policies were outlined in the letter delivered to Mr. Corey. At no time was any of this brought to the attention ofthe full board until board members received phone calls after the letter had been delivered and two nights before the recent board meeting and executive session. ?The bylaws of a nonprofit the nonprofit corporation?s governing (Alabama Business and Nonprofit Entities Code. Chapter 3 Nonprofit Corporations. Section 1) State law indicates ?if the governing documents of a nonprofit corporation so provide, the board of directors, by resolution adopted by a majority of the directors in office, may designate and appoint one or more committees each of which shall consist of two or more directors, which committees, to the extent provided in the resolution, or in the governing documents of the nonprofit corporation, shall have and exercise all the authority of the board of (AL Code Section 10A-3-2.12) Mobile Ballet?s governing documents do NOT so provide. As stated in our bylaws (Article V, Officers, Section 1, President) the president may name board members to standing and special committees, but there are no standing committees indicated and certainly no provision whatsoever allowing officers to assign to themselves the authority of the full board. Thus, any actions taken or recommended by the signees of the letter are null and void. (With easy accessibility to board members via email or cell phone, executive committees have largely outlived their original purpose of dealing with urgent matters between board meetings. in a small, local nonprofit, the role of an authorized executive committee often is to be aware of issues facing the organization and set board meeting agendas accordingly.) The board has, in the past, been asked to vote by email on such things as the Nutcracker Charity Ball beneficiary; why the officers did not see fit to consult the rest of the board on the very significant issues mentioned in the letter to Mr. Corey raises serious questions. 2) Even lawfully appointed committees are required by state law to keep minutes of any meetings and report to the full board: ?Each nonprofit corporation shall of the proceedings of of directors and committees having any of the authority of the board of (AL Code Section Not only was the ?Executive Committee? acting without authorization, but there have been no minutes forthcoming; thus the board has no legal record, or any knowledge, of what transpired at these meetings. 3) There are strict requirements regarding transparency with regard to a nonprofit?s books and records: ?All books and records of a nonprofit corporation may be inspected by any member, director or officer, or his or her agent or attorney, for any proper purpose at any reasonable time.? (Al. Code Section Any board member or staff member should certainly be well familiar with this requirement; financial transparency is foundational to a nonprofit. However, both the board president and development director were unwilling to provide financial records requested by two board members on Tuesday, September 27, until directed to do so by a lawyer. There is no excuse whatsoever for either ignorance ofthe law or obfuscation on financial matters. It is my understanding that the development director also told a staff member that the artistic director was not to be allowed access to the financial records. As he is an officer ofthe corporation, he has every right to access the financial records. As a result ofseveral board members reviewing the financial records reluctantly supplied, it was quickly discovered that S498/month has been regularly paid for the Angelina Ballerina pre-school ballet despite thefact that the program has not been usedfar the last two school years. This is an example of extreme negligence on-the part ofthe development director and of the board treasurer whose responsibility it is to oversee finances and preparation of financial reports. 4) The current ?Development Director/Managing Director? was hired as development director only. At some point in the last several years, she began to be referred to by the new title. Hiring an executive is a primary responsibility of the full board. (Bylaws, The Mobile Ballet, Inc., Article Board of Directors, Section 9, Director(s) and Manager(s) The letter to Mr. Corey states certain goals, including attendance and ticket sales at Ballet productions, increasing student enrollment, increasing patronage ofthe Ballet, and strengthening operational controls.? There are also demands for action including heightening the caliber of guest artists, offering vibrant productions with new choreography, and lengthening the time between previous productions. As there has been no planning process in place for years, and no current strategic plan exists; there is no objective data upon which to base any such goals. Lacking such a process and plan, they constitute nothing more than the personal preferences ofseveral board members. This demonstrates a deep misunderstanding of expected board processes and practices. Strategic planning is absolutely basic to any non-profit, and is one of the cornerstones of the Standards for Excellence of the AL Association for Nonprofits: ?Nonprofits should engage in ongoing long and short?term strategic planning activities as necessary to determine the mission of the organization, to define specific goals and objectives related to the mission, and to evaluate the success of the organization?s programs toward achieving the mission.? (Standards for Excellence: Planning Strategically) This is a project that requires input from all constituencies we serve, and the full board. Likewise, the ?policies? regarding work hours, outside employment, Mobile Ballet property rentals, etc, must also arise from a planning process and collaboration. Mr. Corey sent a letter raising a number of concerns to the board president in March of this year; the letter was never acknowledged or brought to the attention of the board. The president denied having received the letter until her own assistant in the presence of several board members - pointed out that it had, indeed, been received. The concerns raised by Mr. Corey in the letter evidently remain unaddressed. One has only to consult the Standards for Excellence of the Alabama Association of Nonprofits to realize that Mobile Ballet either falls well short, or has accomplished nothing whatsoever in numerous areas: planning; program evaluation (including input from participants); governance; board effectiveness; board education; succession planning; committee minutes; board diversity. The issue of board diversity has become problematic; the interrelationships of a number of board members coming from a small segment of the community could be seen as having undue influence on board and Mobile Ballet matters. Even the appearance of conflict of interest should be avoided. nonprofit should have policies in place, and should routinely and systematically implement these policies, to prevent actual, potential, or perceived conflicts of interest. (Standards for Excellence: Leadership and Operational Management, Managing Employees and Volunteers) Although the board is indemnified against any obligations of the corporation, this is not the case in a representative suit against the officers or directors of the nonprofit corporation for exceeding their authority.? (Section IDA-34.44) in multiple instances that authority has been exceeded, as unequivocally proven by the letter to Mr. Corey. It is time for new and competent board leadership who will move Mobile Ballet forward through collaboration rather than clandestine meetings, and be dedicated to transparency and diligence in all financial, board and operational matters. We owe it to all the audience members, patrons, students, teachers, company members, volunteers and members of the board who have served Mobile Ballet during the last 30 years. Marie S. Grip 10/16/2016