Ghost Town lawsuit alleges smoke-and-mirrors and empty promises

Nov. 30—MAGGIE VALLEY — The back-and-forth legal salvos over control of Ghost Town in the Sky now center on missed court-mandated deadlines, purported shoddy bookkeeping and "wishful thinking" that "mysterious financiers" are coming to rescue the project.

A protracted lawsuit pits Jill McClure, the niece and heiress to former Ghost Town owner Alaska Presley, against Frankie Wood, who was granted part ownership in Ghost Town by Presley before she died. Presley had purchased Ghost Town out of foreclosure after years of failed attempts to revive the shuttered Maggie Valley amusement park. Presley, a long-time champion of Maggie Valley, hoped to reopen Ghost Town in her lifetime, but she died last year before that dream came to fruition.

Before her death, she formed a joint partnership with Wood, who claimed he would be Ghost Town's long-awaited savior. Presley's ownership stake in the Ghost Town LLCs passed to McClure upon her death, but McClure soon filed suit claiming she had been shut out by Wood, kicking off a legal struggle for control for the property by two parties holding an even 50-50 stake.

The issue of insolvency has been argued throughout the proceeding. McClure's attorney, Mary Euler, claims the LLC has no liquid assets other than a South Carolina bank account that purportedly has $100; that the property produces no income; and there is no plan for the production of income for Ghost Town in the Sky in the near future.

While Wood states in court filings that he has investors and financing verbally committed to the project, he fails to provide specifics and no evidence has been produced of any meetings with investors or any feasibility or marketing studies, according to McClure's latest legal filing.

"The reason for Mr. Wood's coyness about investors is unclear. Is it because he is personally loyal to some third party over Ghost Town in the Sky, he has a plan to benefit himself at the expense of Ghost Town in the Sky and needs to obscure the identity of potential investors for that reason, or because there is actually no interest from investors or media companies?" McClure's attorney Euler poses in the filing.

Meanwhile, Wood has claimed in court filings thaty the LLC "does have the ability to make payments for taxes, utilities, insurance, and all basic costs." But wood hasn't show any evidence of that, McClure counters. While Wood claims he "firmly believes that the Ghost Town project will move forward," McClure's latest filing argues that a "belief" does not make it a reality.

"There must be capital investment to keep Ghost Town in the Sky afloat," the filing states, reiterating that Wood has admitted his failure to secure any actual capital investments. An earlier court document stated it would require about $70 million to recreate an amusement park, and indicated a smaller scale development may be required.

McClure's attorney also challenged the admissibility of information provided by Matt Ferguson of Storyland Studios concerning plans for the property, stating he was not listed as an expert witness, and the existence of a purported Storyland proposal was not disclosed in a timely manner.

"Without written commitments, signed contracts, or letters of intent from actual investors, Ferguson's brochures and Mr. Wood's affidavit are nothing more than wishful thinking," the motion states. "It may be possible for all these wonderful investments to occur someday (Wood claims it will all magically happen when this lawsuit is finished), but that possibility does not mean it is practicable to operate the company in conformance with the operating agreement at this time or in the foreseeable future."

While Wood claimed in his affidavit he could produce documents showing his LLC's contribution to Ghost Town in the Sky, he failed to do so in the time set forth by the court, the filing noted.

"Even if Wood could produce receipts, there would be no bank records to trace deposits to determine whether the expenditures were from funds provided by Alaska Presley...because Wood never opened a bank account for Ghost Town in the Sky until after this lawsuit was filed," the lawsuit states.

Excluding evidence

In a separate filing, Euler argued that portions of Wood's affidavit, all documents related to Ferguson, as well the appraisal report submitted by the defendant, should be excluded from evidence. This information came in a previous court-mandated deadline for discovery and was not mentioned at any time earlier in the process when the existence of reports, documents or expert witnesses were required to be disclosed, the court filing states.

The sole holdings of the LLC appear to be the property contributed by Presley, which is 250 acres of land, along with the buildings and rides on the site. The value of the property is a sticking point in the lawsuit, with Euler arguing its worth is the $6.5 million it was valued at when it was placed in the corporation.

Wood's attorney, Russel McLean, submitted an appraisal valuing the property at $2.54 million. If his appraisal is excluded because it exceeded the court deadlines, however, Euler argued the only appraisal on the record is the one provided by her client.

The court document filed on behalf of McClure then lists 16 reasons why is it impractical to continue an arrangement "where the two 50% member-managers are unable to reach agreement with respect to even the most basic management decisions and the current managing member has been grossly negligent in the operation of the company."

The reasons range from poor bookkeeping to Wood's poor history of running a profitable business, the lack of investment on his part, any evidence of effort to develop the property, failure to protect the company assets from vandals, ending with "the company has no employees, no operating revenue, has shown no profit, no actual 'business' is conducted, and the company has no firm prospects of equity or debt infusion."