By Mike Donoghue

The directors of the Woodstock Foundation, who are facing a major civil lawsuit over claims of mismanagement and malfeasance at the Woodstock Inn & Resort and the Billings Farm & Museum, have petitioned a state judge to delay the upcoming trial for another 6 months to allow them to seek a second independent investigation into the allegations.

Foundation Directors James S. Sligar, David M. Simmons, Michael D. Nolan, John T. Hallowell, Douglas R. Horne, William S. Moody, Gail Waddell and Angela K. Ardolic say they want an “independent special litigation committee to review the derivative claims” and determine how to proceed, according to a new court filing.

Two former top Woodstock Foundation leaders, Ellen R. C. Pomeroy and Salvatore Iannuzzi, filed their lawsuit a year ago maintaining they were privately dismissed from the board during a secret, unauthorized board meeting after they began to look into the employee complaints.

Pomeroy, the chair, and Iannuzzi, the vice chair, said they had undertaken a preliminary investigation into serious claims by employees of mismanagement at both the Inn & Resort and the Billings Farm & Museum, and were prepared to deliver a report to the full board in November 2022 when removed, court records show.

The remaining board members hired a New York City law firm to conduct its own wide-ranging independent investigation of the employee claims and also whether Pomeroy and Iannuzzi overstepped their authority as longtime leaders of the board, court records show.

Now Sligar, Nolan, Hallowell, Horne, Simmons, Moody, Waddell and Ardolic want a second law firm hired to conduct another investigation and put the lawsuit on hold for six months.

It is unclear why the second investigation is needed and how it would be funded.

The board has said the written report for the first investigation by the law firm Provenzano, Grann & Bader, showed the firm was unable to substantiate employee complaints about systemic discrimination against women or LGBTQ persons working at the Woodstock Inn or the Billings Farm & Museum. The defendants maintain in court papers the New York City law firm reported it found possible misconduct by Pomeroy and Iannuzzi.

Sligar, Nolan, Hallowell, Horne, Simmons, Moody, Waddell and Ardolic have yet to make public the written investigative report the board said it received last Feb. 16. The report is 70-plus pages and is based on interviews with about 20 current and former employees, the board has said.

The plaintiffs will fight any effort to sidetrack the case, their primary local lawyer Michael F. Hanley of Plante & Hanley in White River Junction said this week.

“Ms. Pomeroy and Mr. Iannuzzi will vigorously oppose the defendants’ motion to stay discovery or any other delay tactic,” Hanley told the Vermont Standard. They will file a required written response with the court before the end of the month, he said.

“The Foundation has already paid for one investigation and there is no need for it to pay for yet another,” Hanley said.

“Moreover, when the Vermont legislature enacted the statute which governs our nonprofit corporations such as the Woodstock Foundation, it did not authorize ‘special litigation committees.’ We expect the decision of the Vermont legislature will be followed by the Superior Court. We will be ready for trial by jury in September,” Hanley said in an email.

Vincent Novicki of Risa Heller Communications, the New York City public relations firm hired to help respond to the lawsuit, said in a statement on behalf of the Foundation that the new investigation was proper.

“It is standard practice for an independent party to evaluate whether a derivative case should proceed, and we feel that is the appropriate next step,” he said in an email.

Vermont Superior Court Judge H. Dickson Corbett, who is presiding at the Woodstock courthouse, had directed the lawyers for both sides last month to file a proposed master schedule before the end of this week to keep the case on a straight path for a fall trial.

Judge Corbett also directed the parties to take advantage of mediation in an effort to try to settle the case before any trial date.

Norwich lawyer Geoffrey Vitt, who represents the longterm interests of the Foundation, said late last week there was no agreement with Hanley on a named mediator.

Hanley said he has proposed a couple of experienced mediators to try to resolve the lawsuit before a trial.

Pomeroy and Iannuzzi had said early in the process they were supportive of trying a neutral mediator to resolve the differences.

Vitt acknowledged in his motion that his request for another investigation was somewhat unusual.

“Although Vermont law does not directly address the use of special litigation committees in corporate disputes, it does recognize the use of special litigation committees in disputes involving other business entities, and we have located no Vermont case to prevent or discourage their use,” Vitt wrote in his motion.

Sligar, who heads the board, did not respond to inquiries from the Vermont Standard about the new motion.

The latest 6-page motion by the Woodstock Foundation and the WRC Holdings LLC said, “the case is still in its early stages.”

The legal process known as “discovery” — when both sides track down relevant information — has been on hold due in part to the motions the defense filed to try to get the case dismissed on multiple grounds. Those failed.

Iannuzzi has reported he began to receive multiple, credible complaints in late May 2022 from numerous employees, including a major whistleblower, outlining claims of misconduct by officers, managers and employees of the Resort, the lawsuit said. Iannuzzi informed Pomeroy about the complaints on June 29, 2022. The litany of issues outlined in the lawsuit included management tolerating the use of the “N-word” by a human resources training manager. Employees also said they experienced harassment if they were lesbian, gay, bisexual, transgender or queer, the lawsuit said.

Iannuzzi, after making a preliminary investigation to confirm the claims had substance, punted the information to Horne and later reached out to Hallowell, but neither defendant took any known positive steps to address the complaints, the lawsuit said.

Iannuzzi eventually made his findings available to Waddell, who urged him and Pomeroy to discontinue any further investigation, the lawsuit said.

“Ms. Pomeroy informed defendant Sligar of the issues that arose under Mr. Hallowell’s and Mr. Horne’s leadership of the Resort and the difficulties she and Mr. Iannuzzi were having in working with their Holdings colleagues to confront the issues,” court papers maintained.

The defendants initially filed a counterclaim against Pomeroy and Iannuzzi and also the chief whistleblower, Anna Berez. A formal written response to the lawsuit also was eventually filed disputing the claims by Pomeroy and Iannuzzi.

While Vitt, a longtime Norwich lawyer, represents the Foundation, prominent Burlington lawyer Christopher Roy is defending the individual board members named in the lawsuit.

Sligar also is one of the defendants that faces a defamation claim in the lawsuit. He recently added veteran Rutland lawyer Kaveh Shahi to help with the legal fight. The hiring came as the court refused a defense request to dismiss the defamation claim.