Settlement is reached, but board members of Ukrainian American Cultural Foundation still at odds (06/19/05)

Settlement is reached, but board members of Ukrainian American Cultural Foundation still at odds

by Andrew Nynka

GLEN SPEY, N.Y. - The Ukrainian Weekly learned last week that a long-running lawsuit by four individuals who claimed they were unjustly removed from the Ukrainian American Cultural Foundation's board of directors appeared resolved with all parties involved in the dispute willing to abide by a court-ordered agreement.

The agreement between the feuding members of the board, made with the help of a New York State court order on January 12, added the four plaintiffs in the original lawsuit to the board plus one of their supporters - bringing the number of people now on the UACF board of directors to 13 - and affirmed the past actions of the original eight-member group.

However, discussions with board members from both sides of the dispute show that a rift in the organization continues. Additionally, one side of the dispute alleges that conditions of the January agreement have been broken and, in fact, serious disagreements over financial and managerial aspects of the UACF - which controls MountainView Resort Verkhovyna - linger.

The dispute stems from a lawsuit begun in 2002 by the four individuals. The lawsuit contended that members of the UACF board of directors initiated a clandestine takeover of the UACF in contravention of the foundation's by-laws.

The people listed as plaintiffs on the lawsuit were Anton Filimonchuk, Olga Filimonchuk, the Rev. Nestor Kowal and Stephan Palylyk. The defendants listed in the lawsuit included Steven Kapczak, Alison Kapczak, Yuri Blanarovich, Sonya Blanarovich and Dr. Oleh Kolodiy.

According to the court settlement, the reconstituted board of directors is made up of the following people: Mrs. Blanarovich, Oleh N. Dekajlo, Mr. Filimonchuk, Mrs. Filimonchuk, Mrs. Kapczak, Mr. Kapczak, Dr. Kolodiy, Mr. Kowal, Olena Makarushka Kolodiy, Volodymyr Maziar, Iwan Nazarkewycz, Mr. Palylyk and Nadia Rajsz.

Mr. Maziar was originally elected as a representative of the Ukrainian community, though Mrs. Rajsz noted in court on January 12 that the board no longer elects a community representative.

The order by the judge in the case, Justice Frank LaBuda of New York Supreme Court in Sullivan County, included a number conditions that both parties would have to abide by in order to have the agreement hold. Among those conditions was the judge's order that the board of directors of the UACF must hold monthly meetings, that they be documented and that full financial disclosures be made during those meetings.

Mrs. Rajsz, who supports the plaintiffs group, and Mr. Filimonchuk have said that no such disclosures have been made and that such a move is in the interest of the community, which together invested some $260,000 into the organization two years ago. They continue to claim that there has never been a detailed accounting of that money.

However, Mr. Dekajlo, the attorney for the UACF, a member of the board of directors and the treasurer of the organization, said that, in fact, such meetings have been held and the opportunity to examine the financial records has been made available.

Mr. Dekajlo said during a telephone interview with The Weekly on June 14 that meetings were held in March, April and May. "We send notices out, they're all posted on the Internet, and there's also a telephone chain so that everybody gets notified. ... The fact that they elect to come or not come, these meetings are videotaped and audiotaped. We do everything according to rules of order. So if you needed to see those videotapes they're all there."

With regard to keeping a record of all UACF board of director meetings, the judge said during the court proceeding on January 12 that he was ordering that all official board meetings be recorded by videotape, which would be kept by the secretary. He said that board members have the right to bring their own recorders if they choose and board members have the right to make a duplicate copy at their own expense of the official videotape of the meeting.

The judge also ordered that full access to all financial records be given to board members.

"There must be, by the way, a monthly disclosure of all income and disbursements so every monthly board meeting all of the income that was received, if any, and all of disbursements that have been made, if any, have to be recorded in the minutes of the board meeting," the judge said.

Several of the UACF board members, including Mrs. Rajsz and Messrs. Kowal and Filimonchuk, said such disclosures have not happened.

"We have a right to know what's happening with the money," said Mrs. Rajsz, who is also a vice-president of the UACF.

In response, Mr. Dekajlo explained that the opportunity to examine the financial situation of the UACF has always been open to board members.

"We made it very clear, and the judge agreed, that anybody who wants, any board member, has full access to the books and records, but they are to stay on location," Mr. Dekajlo said. "If it's going to go to the next level, if somebody wants to have an audit done of the books and records, I made it very clear the foundation is very much in favor of that, we support that. Except, let them designate one qualified individual. Let it be a C.P.A. [certified public accountant] or an accountant or an auditor, and we'll provide them with full access and we'll give them bank authorizations, but we don't want everybody and their mother taking financial records, financial reports, copies of checks, copies of bills out of the office."

Asked whether such a request had been made, Mr. Dekajlo said emphatically: "No, as a matter of fact, at the annual meeting, in the presence of their attorney, we brought the checkbook. We brought the canceled checks. We brought all of the bank statements there. We had it. It was all compiled. But at the same time we don't leave it there on location because we don't want anything to walk."

Mrs. Rajsz had also raised the question recently of logging being done on the Verkhovyna property. She said her group simply wanted to know how the money from that effort had been used. Mrs. Rajsz said her group had not received an answer to that question. Mr. Dekajlo responded by saying that all of that money had been accounted for and, again, could be made available for review by any of the board members.

The president of the UACF, Mr. Kapczak, said that financial records had been disclosed. "Speak with Jerry Orseck, their attorney," Mr. Kapczak told The Weekly via telephone on June 14. "Orseck was there when we disclosed our financial records."

Mr. Orseck has not returned repeated phone calls from The Weekly seeking his comment on the matter. What's more, Mrs. Rajsz said that Mr. Orseck has not returned phone calls from her group either.

The UACF had, at one point, been behind in tax payments but everything has been paid up, Mr. Dekajlo said. "We are now current with every I.R.S. filing."

The group, however, has been allowed some leeway in repaying its mortgage, Mr. Dekajlo noted. "We've had a voluntary waiver of mortgage payments to Mr. Nazarkewycz," who holds a mortgage of $750,000 on the resort. "He has not demanded or required that we make mortgage payments up to this point," Mr. Dekajlo added.

Additionally, the judge said in his January 12 ruling that the five members who were added to the board would serve a term of three years and could only be removed by cause. "And cause would be something that the judge would determine, not any other director," said Mr. Orseck, the attorney for the plaintiffs, according to a copy of the transcript from the court proceeding.

Judge LaBuda asked if Mrs. Rajsz would accept the vice-presidency. Addressing her, the judge said: "I think you would be very helpful, it would be good for [the] Filimonchuks and everyone to have you there so we can get back to being one organization and it is not theirs, it is not his, it is ours."

Mr. Orseck also said that he would add a "measure of protection for the Filimonchuk group of five," saying that his legal office in Liberty, N.Y., "would be retained as local counsel" for one year, while Mr. Dekajlo would continue to serve as general counsel. Mr. Orseck's appointment as local counsel would help day-to-day UACF needs, as the lawyer's office is located in Sullivan County. "Should something arise and need some immediate legal attention" there would be a lawyer to mediate the situation, Judge LaBuda said.

One final point of the agreement included the possible election of an additional member to the board of directors. The plaintiffs in the case wanted to have Lou Demchuk elected as the 14th member of the board during the organization's next annual meeting, which took place on April 10.

Mr. Filimonchuk said during the court proceeding that he feared his group would, in effect, be a minority on Mr. Kapczak's board. Judge LaBuda corrected him, saying, "It is not going to be their board anymore. It is going to be our board," and he added that the addition of Mr. Demchuk would help balance the interests on the board.

"I see no reason that they would not agree to have Mr. Demchuk on the board," the judge said. "He would be a mutual individual. He has connections in Ukrainian [sic] and other places in Washington. He would be a very good individual for this particular board."

The judge added that if Mr. Demchuk was not elected to the board at the annual meeting "he shall have the right to come to this court to seek judicial intervention on a standard of just cause as to whether or not there was just cause for not electing him."

However, during the annual meeting on April 10, Mr. Demchuk's election to the board did not happen, as the board decided to table a vote on his election. Mr. Dekajlo said there were just too many uncertainties about Mr. Demchuk and the board was not very familiar with the man's work.

"I asked him to put it in writing and submit a proposal of what he brings to the board," Mr. Dekajlo said of Mr. Demchuk, "because everybody in that board has either spent thousands of hours, myself included, working for the resort and the festival. He has not. And to now bypass other volunteers that are not board members is just not fair to them."

"He hasn't given us that which we asked for," Mr. Dekajlo said during a telephone interview on June 14. "So, at this point, we've just tabled it until the issue gets revisited either by them or by the court."

The issue has not been brought before Judge LaBuda and Mrs. Rajsz said her group is now deciding what action to take with regard to Mr. Demchuk. She said her group is interested in bringing the entire issue back before the court.

Mrs. Rajsz also added that Mr. Dekajlo improperly promoted Mrs. Kolodiy to the position of third vice-president, made Mrs. Blanarovich the first-vice president and demoted Mrs. Rajsz to second vice-president.

In addition to Mr. Kapczak as the president and Mr. Dekajlo as the treasurer, the other leadership positions of the UACF, according to Mr. Dekajlo, include that of secretary, the post held by Dr. Kolodiy.

The judge also said that the assets of the UACF cannot be privatized, as the law of the State of New York protects non-profits from making such a move.

The judge concluded the January 12 court session, saying:

"I think this is a good resolution. I really do. And I know the people who are involved here. I know how important the Ukrainian organization is to Ukrainian people, but you are more important, folks, than just to the Ukrainian people.

"I want to tell you that my Yugoslavian friends, my German friends, my Czechoslovakian friends and I look forward to the annual festival, look forward to going to Glen Spey to the Catholic Orthodox Church or to the Orthodox Church for their services.

"You have a responsibility not only to Ukrainian people, but to all our European brothers and sisters to make sure that the Ukrainian organization and community not only stays in Glen Spey but flourishes and becomes bigger in Glen Spey, N.Y. And when you leave here today and when you conduct your meetings, remember that you have a high degree of responsibility to carry on the culture, the traditions of Ukraine which are so important to all of our European friends, including myself."

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