A years-long legal battle between a local music venue designer who built the Vina Robles Amphitheatre and the managing companies that own it has been settled, both parties confirmed Monday.
On Friday, a final mediation session was held between attorneys for the Vina Robles Amphitheatre, managing partner Hans Michel, and its former general manager Tim Reed, before the case was scheduled to go to trial in October.
The parties reached the settlement late Friday, attorneys confirmed, but the terms of that agreement are to remain confidential.
The settlement must still be finalized by the court; the case is scheduled for a hearing in San Luis Obispo Superior Court on Wednesday.
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Vina Robles Entertainment, LLC and another company held by the owners of the venue were facing possible dissolution after former general manager Tim Reed sued in March 2016 for alleged breach of fiduciary duty, breach of both written and oral contract, fraud, and unfair business practices.
He sought dissolution of Vina Robles Entertainment, a recouping of his lost shares, and an unspecified amount in punitive damages and legal fees.
Reed alleged he was wrongfully terminated days after the first concert season ended and lost shares of the business that he was promised in exchange for his below-market-value work.
Both Ilan Funke-Bilu, who represented Reed, and Martin Moroski, who represented Vina Robles and Michel, declined to comment on the settlement. But Reed provided a statement over the weekend saying he’s pleased the ownership and management of the venue “chose to resolve our differences.”
“Although it may appear to an outsider that the amphitheatre popped up overnight in 2013, it was actually a 20-year effort that came at significant personal costs. I lost jobs over it, I lost friends over it, and it took years from my life,” Reed said. “In the end, it was worthwhile to be able to give this gift to the people and the County of San Luis Obispo.”
He said the mission statement for the venue from the beginning was to provide an “asset and vehicle” that could be shared by everyone and which would culturally enhance the county.
“In the years to come, I hope the community will be as proud of it as I am,” Reed wrote. “I am deeply passionate about the live music experience, and I only ever wanted to do what I love, for the people I love, in the place that I love.”
Reed has since gone on to build the Big Sky Brewing Company Amphitheater in Missoula, MT. He is currently director of production for Knitting Factory Entertainment.
In his complaint, Reed stated that since 1993, it was his “life’s goal” to build an amphitheater in San Luis Obispo County. During a career that included working for big-name concert promoters such as Bill Graham Presents, Live Nation and Clear Channel, and worked for two concert seasons as the general manager of the Shoreline Amphitheatre in Mountain View, Reed continued to look for opportunities to develop a large concert venue in San Luis Obispo County, including unsuccessful bids to develop venues at the SLO Botanical Garden, El Chorro Regional Park and Camp San Luis Obispo.
According to his lawsuit, Reed was at the Vina Robles vineyard in Paso Robles in 2009 when he figured it would be a suitable property for the venue he envisioned. He met with Michel, president of Vina Robles Inc. (VRI), who agreed that Reed would act as a consultant initially with the promise to become a partner in the company if they were successful in building the venue. He consulted for VRI at below-market pay, the lawsuit states, in exchange for sweat equity — or interest earned through labor.
Throughout 2010, Reed worked with Paso Robles city planners and defeated a complaint from the county Airport Land Use Commission before the project was eventually approved in August 2011.
A memorandum of agreement was entered into in 2012 in which VRI formed Vina Robles Entertainment LLC (VRE) and granted Reed 22.5 percent of pre-tax interest in VRE and a 3 percent interest in Vina Robles Amphitheatre LLC. The lawsuit states Reed was granted the stakes in the companies to induce him into accepting a low salary, between $40,000 and $66,000 annually.
From 2012-13, Reed oversaw construction of the venue, which opened in May 2013, and managed its business. As stipulated by his employment agreement, Reed was given the title of general manager and his salary was increased to between $60,000 and $70,000 a year.
The venue was a big success, but almost immediately after its completion, the lawsuit alleges, Michel’s attitude toward Reed changed, and management “put into action their scheme to revoke their promised partnership ... and instead keep the bounty created by (Reed’s) specialized knowledge and tireless hard work over the past five years.”
Reed was fired “for cause” on Oct. 17, 2014, based on five unspecified violations of the employee handbook, the lawsuit states, and “forfeited and canceled” Reed’s shares in the companies.
After filing his lawsuit, Vina Robles Inc. filed a counter lawsuit against Reed, alleging that Reed concealed facts about his employment background and misrepresented his qualifications during his negotiations to become the general manager.
Calling Reed’s tenure a “disaster,” the company claimed Reed alienated key employees and stakeholders and exposed the companies to civil liability. The companies further alleged that Reed’s employment was based on set financial goals, which the he “did not come close to reaching.”
Both parties are due back in court Wednesday.
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