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Lawsuit claims Ghost Town heir not a corporation member
Vicki Hyatt, The Mountaineer, Waynesville, N.C.
5 min read
Sep. 18—The tug-of-war continues between developer Frankie Wood and Jill McClure, who has inherited her aunt's business interests, including Ghost Town in the Sky LLC.
After Alaska Presley passed away in April at age 98, McClure attempted to get access to and an accounting of what was happening with the business dealings Presley and Wood held in common. Wood did not respond to those requests, so McClure filed a lawsuit to dissolve the joint corporations, which she claimed were insolvent.
Wood hired Waynesville attorney Rusty McLean, who had the case transferred to state business court, which has been set up to handle lawsuits regarding complex business dealings. McLean's response to the lawsuit became available Thursday.
In that filing, McLean argued McClure's lawsuit has no legal standing as she has not been admitted as a member of the corporation.
The response cites an operating agreement between Coastal Development Carolina, LLC and Presley concerning the governance of Ghost Town in the Sky, LLC with Coastal Development, LLC ("Coastal") as the managing member.
Section 12.4 of the agreement states: "Upon the death of Alaska Presley occurring while Alaska Presley is a member under this agreement, then and in that event, Jill Holland McClure will succeed to all of Alaska Presley's membership interest under this agreement, with all the interests, rights and duties previously held by the decedent."
McLean's response, however, states while the economic interests were transferred to McClure, she never became a corporation member, thus has no "standing," or right to ask that the corporation be dissolved.
A member is defined as "a person who has been admitted to an LLC as provided in the operating agreement," the legal document contends.
McLean's response cites Section 12.4, and then references Sections 10.2-10.6 "transfer to a related party," which state membership transfer gives the assignee only the right to receive the share of income, losses and distributions and shall not be effective to constitute the assignee as a member.
Section 10.5 of the agreement states, in part, that any assignee who does not become a member "has no right to share in management decisions, examine company books and records and not other rights of any kind," something McClure's lawsuit said she wasn't allowed to do.
By failing to submit facts showing corporation membership, McLean wrote that the defendant has failed to state a claim for which relief can be given.
"The thing about business court is you have to establish you have a right to do something," McLean said in an interview. "The biggest canyon there is is the difference between what the law says and what people think it says."
McLean said he strongly believes Wood's position is correct and the matter will be solved in 30 days.
"This was set up exactly the way Alaska wanted to set it up because she wanted it to comply with the way she wanted her property to be handled," McLean said. "It's Alaska that created that document."
Counter-argument
McClure's attorney, Mary Euler with with Asheville firm McQuire, Wood and Bissette, contends McClure is a member of the corporation as Presley's heir.
"[The lawsuit] has not responded to any of the substances nor refuted to any of the actions of his client," Euler said. "I contend the operation agreement says Jill is a member and that's the straight-up truth. The court will decide. I'm pretty confident in our position. The portion he is arguing is subject to another portion of the agreement that says Jill stands in the place of Alaska."
Euler said she will file a response within 10 days, and then the judge will respond.
If it is determined McClure does have standing, Euler would like a court decision on whether a receiver will be appointed to liquidate the assets. Since the corporations have no money, she's asking that McClure serve as that receiver, but should another party be appointed, the request is that Coastal Development should pay for it.
As far as is known, properties contributed by Presley are the only assets in both Ghost Town in the Sky, LLC, and Maggie Valley RV Park LLC, the other corporation where Presley and Wood were founding members, Euler said.
If the corporations are dissolved, Euler said Presley's capital contributions would come back to McClure.
"There would need to be some accounting to see if Frankie put in anything, but he's not provided that information so far," Euler said.
The business court paperwork also includes the name of another law firm, Abrams & Bayliss, a Delaware-based law firm. Euler said for an out-of-state firm not registered in North Carolina to be part of a case, a form called a {span}pro hac vice would need to be filed, and she said she saw no evidence that had happened.{/span}
When Ghost Town in the Sky, LLC was originally formed in 2020, Diane Sherrill of Sylva, represented both Wood and Presley. For decades, Presley had been represented in legal matters by her long-time attorney Bob Long, but his services were not used in this case.
McClure's lawsuit was originally sent to Sherrill, who is the registered agent for the corporations, but Wood instead turned to McLean to represent him in the lawsuit.
