Vina Robles Amphitheatre sued by former manager for alleged fraud

The Vina Robles Amphitheatre before a concert by the rock band ‘Yes’ in 2013.
The Vina Robles Amphitheatre before a concert by the rock band ‘Yes’ in 2013. ldickinson@thetribunenews.com

A key figure in the construction and operation of one of San Luis Obispo County’s most popular concert venues is suing its parent companies and management, alleging he was wrongfully terminated and in the process lost shares of the business he was promised in exchange for his below-market-value work.

Former general manager Tim Reed filed suit in San Luis Obispo Superior Court against the managing companies of Vina Robles Amphitheatre, alleging breach of fiduciary duty, breach of both written and oral contract, fraud, involuntary dissolution and unfair business practices. He is seeking an unspecified amount of punitive and compensatory damages, with interest, as well as recovery of attorneys’ fees.

Located on the grounds of Vina Robles Winery & Vineyards in Paso Robles, the hillside amphitheater is a 3,300-seat outdoor venue that has hosted wide-ranging acts from B.B. King to ZZ Top, Tony Bennett to Ziggy Marley, Tears for Fears to Rob Zombie.

On Friday, Vina Robles spokeswoman Simone Michel denied Reed’s claims in an email to The Tribune and said the venue’s legal counsel will respond to Reed’s specific allegations in a future court filing.

“The Vina Robles team is disappointed that Mr. Reed chose to file a lawsuit and denies Mr. Reed’s claims,” Michel wrote. “A detailed response and further comment will be made in the lawsuit through counsel for the Vina Robles entities and the individuals Mr. Reed has sued.”

Reed’s attorney could not be reached for comment and a phone call to a number listed for Reed was not answered Friday.

In his complaint, Reed states 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 serving 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 the filing, in August 2009, Reed was at the Vina Robles vineyard when he determined it would be a suitable property for the venue he envisioned. He met with Hans 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 2012-2013, 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.”

On Oct. 17, 2014 — days after the conclusion of that year’s concert season — the companies terminated Reed “for cause,” based on five unspecified violations of the employee handbook, the lawsuit states, and “forfeited and canceled” Reed’s shares in the companies.

According to Reed’s employment contract, which was attached as an exhibit in his lawsuit, Vina Robles could terminate Reed’s contract “with cause” with 30 days notice. According to the contract, cause included a breach of the employee handbook, an act of misappropriation, a felony criminal conviction, damage of Vina Robles property, negligence and “the repeated nonprescription use of any controlled substance or repeated use of alcohol” that reasonably hinders the employee’s ability to perform job duties.

The lawsuit calls Vina Robles management’s actions “willful, wanton, malicious and oppressive,” and it is seeking unspecified punitive damages and restoration of Reed’s shares in the companies.

Matt Fountain: 805-781-7909, @MattFountain1