ODAM Law

Restraining-order request dropped but suit continues in Wilmot case

11th February 2000

Restraining-order request dropped but suit continues in Wilmot case

Date: 2/11/2000

by JOHN KREROWICZ

KENOSHA NEWS

The couple suing Wilmot Mountain's owner dropped their restraining-order request but are continuing their lawsuit claiming they have a contract to buy some of the ski-hill facility.

Jeanette and Steven Schwarzbach withdrew their request Wednesday after the defense attorney asked for a security bond of almost $900,000.

The bond is required by law for a restraining order. The bond is used to pay for the defendant's financial losses if the plaintiff doesn't win the lawsuit. The ski hill's losses could include legal fees, paying more in interest on loans than would be required if the debts were refinanced and bypassing a sale.

The plaintiff buys an insurance policy for the bond amount rather than posting the cash, sources said.

The couple, 11903 Fox River Road, sued Diane Reese, Wilmot Mountain majority owner, in December for allegedly not honoring a November 1998 purchase contract.

Reese has been in negotiations since at least November 1999 to sell to Steve Thelen, of Thelen Sand & Gravel of Antioch, Ill. The couple also have sued Thelen for interfering with the Schwarzbachs' contract.

The restraining order would have prevented sale or transfer of Wilmot Mountain's assets until a resolution of the matter. Jeanette Schwarzbach said she is not worried that Thelen now would purchase the popular ski hill before a resolution.

`` As long as this litigation exists, no one will buy it knowing that if we win, we'd be entitled to 36 percent of the land and a majority of the corporation,'' she said, outlining some of the terms of the contract.

`` So then Thelen would have paid a few million dollars for it, and what have they got? They're not stupid.''

Jeanette Schwarzbach also said if they win the lawsuit against Reese, 11901 Fox River Road, they'll ask for punitive damages against Thelen.

The Schwarzbachs claimed Thelen improperly offered money to Reese to walk away from the 1998 agreement with the couple. They said Thelen wanted to excavate the ski hill, 11931 Fox River Road, although Thelen has said that's not his intention.

Defense attorney Gino Alia said the ski facility could be sold in the meantime or before any trial but that was unlikely. He represents owner Reese and two of the involved partnerships.

Paul Gagliardi had represented Reese but called in another lawyer because he could be a witness in the case. Gagliardi said negotiation discussions will continue with the Thelens.

`` They would provide the financial stability that would improve operations and broaden the scope of operations,'' he said.

Gagliardi has said there is consideration of activities at the ski hill during seasons other than winter.

`` The Thelens want to work with Mrs. Reese toward the continuous operation of the ski hill today and into the future,'' Gagliardi said. `` Mr. Schwarzbach has imposed a significant impediment to achieving those goals.''

Alia on Wednesday filed a request to have the lawsuit against Reese dismissed. A March 22 hearing was set on that request. Schwarzbach said she is planning to file her own motion to have the matter settled in the couple's favor without further court hearings.

Alia said he would have agreed to the injunction because no transfer of assets was foreseen for 60 days.

Gagliardi said the arrangement is more of a transfer of assets than a sale. He said all negotiations have included Reese as continuing as the operating partner.

Wilmot Ski Mountain went into receivership in mid-December. That prevents legal action by creditors. The Ski Mountain is some $3.5 million in debt.

Receivership prevents creditors from suing, taking other legal action or continuing court action against the popular ski facility.