Ruling issued over struggle to control Ghost Town

Dec. 10—MAGGIE VALLEY — After a Nov. 22 hearing in a lawsuit that will determine the future of the Ghost Town property was abruptly canceled, the N.C. Business Court posted two key rulings in the case.

One ruling denied Developer Frankie Wood's request to dismiss the case, which will is now clear to proceed. The other ruling determined there was no need to appoint a receiver to manage the business, and declined to impose a preliminary injunction to halt activities of the property's managing member, Coastal Development, LLC.

The rulings were issued by Special Superior Court Judge for Complex Business Cases Adam M. Conrad.

The attorneys representing the two opposing parties say they are delighted with the outcome, albeit for differing reasons. (See related article.)

The case was filed by Jill McClure, the niece of late Maggie Valley icon Alaska Presley, who was designated by Presley to assume her role as a member in two limited liability corporations formed prior to her death with South Carolina developer Frankie Wood.

Wood is the managing member of both corporations, and McClure filed legal action after alleging she had no access to the property or financial records and feared both entities were insolvent after finding that bills weren't being paid. Her lawsuit asks that both corporations be dissolved.

Ghost Town in the Sky LLC owns the 200-plus acres on Buck Mountain that Presley dreamed of reopening as the long-closed Ghost Town in the Sky western-themed amusement park. Maggie Valley RV Park LLC is a 4-acre development originally slated for recreational vehicle parking, but now is in the early process of being developed for 22 permanent home sites.

McClure is represented by Mary Euler with the Asheville firm McGuire Wood and Bissette, while Wood has retained Waynesville attorney Russell McLean as his attorney.

While McClure claimed she was heir to Presley's interest in the LLCs formed with Wood, McLean had argued that the McClure was not a full member and thus had no standing in the affairs.

The court order ruled in McClure's favor, citing provisions in the LLC operating agreements stating that McClure would "succeed to all of Alaska Presley's Membership interest . . . with all the interests, rights and duties previously held by the decedent."

McLean had cited a different provision within the operating agreements about transferring memberships and argued McClure hadn't applied to become a member. The judge rebuffed that argument, indicating it applied to subsequent members that might be added to the board.

An operating agreement is a contract, Conrad wrote, and these two contracts at issue clearly state that McClure would succeed to all of Alaska Presley's membership interest.

"This is not a partial grant of economic rights. It is a comprehensive grant of all membership rights held by Presley. All means all — not some or part," he wrote.

Receivership denied

Contending both LLCs were insolvent, Euler asked that the business of both corporations be placed under a receiver while the court decides whether to dissolve them, and that McClure should be the person designated.

Courts have traditionally ruled that a receivership is a harsh remedy, Conrad noted, and the standard for a preliminary injunction is even higher. These points were argued by McLean in his briefs.

Conrad ruled there is insufficient evidence showing the corporations are insolvent, thus McClure has not met the high bar of proving "there is no other safe and expedient remedy."

The urgent need argued by Euler to appoint a receiver and enter a preliminary injunction has now been addressed through the court action declaring McClure a full member of both LLCs with the right to demand access to financial records of both corporations, the court documents state.

"McClure's membership rights have been restored. And she now has access to all the tools of liberal discovery in civil litigation," Conrad wrote. "Indeed, discovery may provide much of the relief that she seeks (including, potentially, access to account information, books and records, and more). It will also allow her to test her concerns regarding the LLCs' solvency. As it stands, the record is far too murky to show the true status of their finances."

McClure has the right to renew her motions if she develops sufficient supporting evidence through discovery or if the companies do not live up to their representation that they will treat her as a member going forward, the court order states.

There will be a status conference in January or February to discuss the status of discovery, the level of cooperation among the companies' members, and any negotiations concerning a buyout, the ruling concluded.