Tags: County Report
June 04, 2013 | 03:36 PMELKHORN — Chandra Webster probably won't have to face jail time on a contempt of court charge for some time — if at all.
Webster was an officer of Geneva Hospitality LLC, the company that managed The Cove of Lake Geneva, 111 Center St., Lake Geneva, for nearly 20 years.
The company was replaced as the hotel manager last year as part of legal actions taken by PNC Bank of Lake Geneva.
David C. Williams, attorney for Geneva Hospitality LLC, the company Webster served as a chief financial officer, said neither he nor Webster's attorney, Jerome Buting, Brookfield, have received an order specifying what is demanded of Webster so she can satisfy the court and avoid jail time.
Williams said his client, Geneva Hospitality and its officers, are asking for immunity before answering any questions.
"We have the right to know what it is they want from us," Williams said. He said he doesn't have the order yet.
At a court hearing on May 16, Judge John Race gave Webster a week to produce the required documents, or he will seriously consider the request by the hotel's receiver, attorney Michael Polsky, that Webster serve time for contempt.
Williams said he interprets the judge's order as: "We have a week after that order to comply."
And if any party on the suit drafts an order, another party has five days to object to that order, he added.
PNC Bank asked Walworth County Circuit Court to place the hotel in receivership. PNC holds substantial loans and mortgages at the hotel.
PNC wants an accounting of a $1.65 million loan made to the Cove in 2007 and for an earlier loan for $250,000. Both loans were by predecessor banks that PNC has since bought out. Although Geneva Hospitality was not named in the court case originally, the receiver, attorney Michael Polsky, Milwaukee, determined the management company is the holder of financial and accounting records for the hotel.
Geneva Hospitality, and Webster, were made responsible by the court for turning over financial and accounting information to the receiver.
Webster was first cited for contempt by Race on Jan. 18 after she failed to turn over financial documents to the court.
That same month, Webster later showed up at Polsky's Milwaukee office with boxes of financial documents. The contempt order then was held in abeyance.
On May 10, Polsky entered a brief asking the court to enforce the contempt order against Webster. Polsky argued that the documents Webster turned over were inadequate, and that she never turned over the accounting data as ordered by the court.
Polsky, the court-appointed receiver for the financially-troubled Cove, said he was frustrated with a lack of accounting information provided by Geneva Hospitality and with Webster's refusal to answer questions during two subsequent depositions.
The next hearing involving the Cove will be 2:30 p.m. June 20 at the Walworth County Judicial Center.