By Mike Donoghue, Senior Correspondent
The Woodstock Foundation Board of Directors have agreed to a proposed out-of-court settlement with the former longtime chair and vice chair of the board in their lawsuit over claims they were improperly removed and that the Woodstock Inn & Resort and the Billings Farm & Museum had been mismanaged.
The Foundation Board had secretly began to oust both chair Ellen R.C. Pomeroy and vice chair Salvatore Iannuzzi in November 2022 after the two leaders attempted to investigate and address multiple credible complaints by employees about mismanagement and malfeasance, records show.
The removals of both Pomeroy and Iannuzzi were completed in what has been called an 11-minute “annual meeting” orchestrated by the defendants on Jan. 27, 2023, according to the plaintiffs’ local lead lawyer, Michael Hanley of White River Junction.
Pomeroy and Iannuzzi filed an initial 31-page blockbuster lawsuit on behalf of themselves and to protect the Woodstock Foundation and the WRC Holdings LLC. Pomeroy and Iannuzzi amended their initial eight-count lawsuit at least three times after uncovering new claims, new evidence and new defendants as the case unfolded, records show.
A counterclaim was filed on behalf of the defendants named in the lawsuit: James S. Sligar, the current chair, David M. Simmons, the president, Michael D. Nolan, John T. Hallowell, Douglas R. Horne, Williams S. Moody, Gail Waddell and Angela K. Ardolic.
The counterclaim maintained Pomeroy and Iannuzzi had breached their fiduciary responsibilities and had overstepped their authority as longtime board leaders.
The defendants also filed a general denial in court for the various misconduct claims in the lawsuit. Both sides, without explanation, later agreed to drop Moody, who worked for the Rockefeller Brothers Fund for 40 years, as a defendant.
The terms
The two sides, who have not agreed on much during the 2 ½-year legal fight, have now filed in Vermont Superior Court in Woodstock a proposed five-page settlement agreement with multiple signature pages for all the parties and lawyers on the case.
The presiding judge must approve the derivative claims and ensure all shareholders and members are properly notified before the court will consider closing the case, according to the filing.
Pomeroy and Iannuzzi appear to have prevailed on several of the key claims they had sought in their long-stalled lawsuit, according to details included in the proposed settlement.
As part of the agreement, the Foundation has agreed to pay $750,000 in legal fees for the benefit of Pomeroy and Iannuzzi. Hanley and his law partner Paul Perkins have been working with lawyers Elkan Abramowitz and Andrew Levander of New York City on the lawsuit since it began.
Also among the settlement terms is an agreement for a major change in how the Foundation Board is comprised. The Foundation will be required to ensure that at least 50 percent of its board membership will be new people by April 30, 2026.
It is unclear to the general public who is on the present Foundation board, and the multi-million-dollar entity does not maintain a website or other public profiles listing their board members and officers.
Sligar, Simmons and the public relations firm in New York City that the Foundation hired for this case have all refused to respond to ongoing inquiries by the Vermont Standard about the recent board makeup or about reports that some Trustees are no longer serving.
Iannuzzi, who is a long-time part-time resident of Woodstock, said after filing the legal action that part of the reason was to try to get new, responsive blood on the board.
He had said he and Pomeroy were not expecting to return to the board, but the plaintiffs believed the Foundation could no longer operate in its recent business-as-usual behavior.
Pomeroy and Iannuzzi also said they wanted the superior court to strike some of the actions the recent Foundation Board had implemented since the overthrow began in November 2022.
The proposed settlement notes the defendants have informed the plaintiffs that the boards of both the Woodstock Foundation and the Holdings LLC have taken steps to improve operations at its properties, including with Human Resources.
The defendants “have established and implemented certain operating principles and policies, including expansion of Human Resources programs, affecting all employees…” the filing noted.
The steps are “intended to build on prior progress and are expected to cultivate greater collaboration, improved efficiency, and overall satisfaction with the ongoing goal that staff and guests will mutually benefit from a heightened sense of well-being, engagement and service excellence,” the settlement noted.
The lack of standard Human Resources policies and procedures apparently was the breaking point in the case and led to the investigation by Iannuzzi and Pomeroy. Dozens of rank-and-file employees complained about sexual harassment, sexual discrimination, unfair pay issues, poor working conditions and more, court records and interviews by the Vermont Standard with employees showed.
Multiple employees also reported a senior management person had a sexual relationship with a subordinate employee, court papers show.
In court papers, Iannuzzi said he was told two trustees, Hallowell and Horne, were aware of the inappropriate sexual relationship, but failed to disclose it to the rest of the board when the senior management person was under consideration for a promotion in July 2021.
Management also tolerated a human resource training manager’s frequent use of the “N-word,” according to the lawsuit.
The Pomeroy and Iannuzzi lawsuit maintained that other trustees turned a deaf ear to the employee complaints and instead the board worked behind the scenes to unceremoniously dump the two leaders.
As the lawsuit progressed, defense lawyer Christopher D. Roy of Burlington maintained the Foundation had taken positive steps. However, Hanley noted that many of the claimed steps were based on the recommendations Pomeroy and Iannuzzi had proposed in September and October 2022, about a month before the efforts to oust them.
The defendants also attempted several retaliation steps against a former employee, who was the initial whistleblower, the lawsuit maintained. They included telling employees to call police if she or Iannuzzi were spotted on the Billings Farm property.
Simmons, acting on behalf of the defendants, attempted to silence the whistleblower, Anna Berez, by canceling her health insurance, court records claimed. The defendants also caused the Billings Farm not to pay her the three-months of severance pay that she was promised, records show.
The proposed settlement also requires the by-laws for the Woodstock Foundation and the Holdings will be amended by Jan. 1, 2026 to block further payments to board members for providing management or professional services.
This requirement is apparently designed to eliminate the conditions outlined in the lawsuit that reportedly allowed Trustee John T. Hallowell to be paid nearly $1.5 million plus generous benefits and free luxury housing between 2018 and 2022 without knowledge of the full foundation board, according to court papers.
While Hallowell was collecting nearly $1.5 million, documents filed by the Foundation with the Internal Revenue Service indicated he was paid “zero,” the lawsuit said.
The proposed settlement does say in going forward some token payments for serving on the Foundation board will be allowed and some reasonable expenses may be reimbursed.
Judge will rule
Judge H. Dickson Corbett will need to sign off on the proposed agreement in the coming weeks after a full legal review.
The Vermont Standard uncovered the terms of the proposed settlement while making a routine check at Vermont Superior Court in Woodstock after the parties and lawyers for both sides went silent in recent weeks about the pending case.
A virtual gag order on all parties is included in the proposed settlement, apparently requested by the Woodstock Foundation Trustees that were sued.
The gag order does allow for a one-sentence statement that all parties agree to use if asked for comment by the media or any other third party.
The scripted response is: “We are happy to announce that the litigation involving the Trustees of the Woodstock Foundation and WRC Holdings LLC has been settled.”
One apparent problem with the joint statement is nobody ever publicly announced the settlement for the nasty legal fight until after the Vermont Standard had begun to ask about the settlement filing last week. The case has mesmerized the Woodstock community since November 2022.
Simmons, as president of the Billings Farm, shared a note from Sligar, as chair of the Foundation, late Friday night with employees that the settlement was reached.
“I wanted to provide you with an update on the litigation involving the Trustees of the Woodstock Foundation and WRC Holdings, LLC, which we are happy to announce has been settled,” Sligar wrote.
“I know that some in our community have been following this, and we wanted to make sure that we provided you with an update and made you aware that there has been a resolution,” he said.
Among the defense lawyers signing off were Christopher D. Roy of Downs Rachlin Martin in Burlington for the individual trustees, along with Geoffrey J. Vitt of Norwich and Matthew J. Connelly of Boston on behalf of the Foundation Board.
Also approving the agreement for the defense was Rutland lawyer Kaveh S. Shahi, who was retained by Sligar to fight a defamation claim filed against him and four other trustees.
The final defense approval came from Boston attorney Jacob J. Struck, who was retained by Hallowell apparently to help defend against the $1.5 million unjust enrichment claim that was added by the plaintiffs to the lawsuit as the case progressed.
The defendants have been tight-lipped for much of the monumental lawsuit, even after hiring a New York City public relations firm to help them guide their messages to the community.
Both sides said in recent days when reached by the Vermont Standard they could not comment on resolving the long-stalled civil lawsuit or about what steps will be taken to avoid future legal issues.
The settlement statement apparently does not allow for follow-up questions or elaboration on questions from people in the community.
The gag order is intertwined in a non-disparagement provision. It prohibits any negative comments concerning the “integrity, business operations, conduct, reputation, ethical standards, or character of any other party, or that party’s officers, directors, executives, employees, attorneys, agents or consultants.”
The agreement does say the parties can break the confidentiality agreement if there is a government investigation.
Making the claims
Iannuzzi and Pomeroy have said they filed their civil lawsuit in an effort to help get better working conditions for the local employees. The employees had privately complained about mismanagement, sexual harassment and discrimination and malfeasance by officers and management, both at the Inn and the Farm, court records claimed.
Iannuzzi and Pomeroy maintained more than 40 employees had spoken up, but the board removed the two leaders before Iannuzzi could report his findings to all the trustees at a board meeting.
Pomeroy and Iannuzzi had tried to get the court to block the defendants from using the Foundation bank accounts to pay for their defense fees. Judge Corbett did rule on a pre-trial motion that even if the plaintiffs proved the merits of their case and the Foundation was “entitled to reimbursement from the individual defendant that reimbursement could be effectuated later in the form of money damages.”
Corbett cited a 2017 Vermont Supreme Court case involving the town of Cabot, noting “that a harm is not considered irreparable if the harm can be remedied by the payment of money.”
One count in the lawsuit was filed only against Sligar and Nolan, who are both lawyers, claimed malpractice. The lawsuit maintained they both provided legal advice to the Foundation, the Holdings and the trustees of both organizations. It claims the advice offered was not consistent with the standard of care other lawyers in Vermont would have provided, the records note.
Pomeroy was an original Foundation member and had been the chair for almost 10 years. Iannuzzi had been on the Foundation board for 13 years and vice chair for 7 years, records show.
The defendants argued Pomeroy and Iannuzzi — as soon as they became former board members — had no legal standing to file the civil lawsuit. The court rejected that claim.
Reaching the settlement
Judge Corbett had directed both sides in January to undergo mediation by the end of March with the now retired Superior Court Judge Helen Toor. She operates Toor Mediation in Chittenden County after 25 years on the trial bench.
The mediation session in March was confidential, but apparently got both sides moving toward a settlement in the contentious case.
The proposed settlement comes as both sides faced an April 30 deadline set by Judge Corbett for completion of all depositions of witnesses. Hanley had told the court in January he expected the live question-and-answer sessions under oath with every individual trustee would take about two hours each.
Judge Corbett had ruled he saw the lawsuit breaking into two trials. The first trial would cover the claimed make-up of the board and the actions it had taken. The first trial would focus on three Foundation board meetings: two special sessions on Nov. 11, 2022 and Nov. 23, 2022 and the so-called annual meeting on Jan. 27, 2023.
Corbett said the first trial would be like a one-count lawsuit over whether the actions taken at those three meetings — including naming replacements for Pomeroy and Iannuzzi — were without legal authority. At issue was whether the foundation board was properly constituted as of the January 2023 meeting and what was or was not discussed at the session.
Hanley had maintained that what didn’t happen at the orchestrated annual meeting was as important — and maybe more important — as what did play out.
Corbett said the second trial, if held, would cover the other claims in the wide-ranging lawsuit.
Corbett had to get the lawsuit back on the tracks a few times as the case got bogged down. At one point the defendants spent considerable time chasing down and recommending a six-month delay in the case by suggesting an alternative legal process: proposing a “Special Litigation Committee.” That process had never been used in Vermont before and the idea failed to get to first base with Judge Corbett, who soon had the case back on track.
The defense also had even asked the court at one point to block depositions of the trustees.
After Iannuzzi and Pomeroy were removed, the defendants hired a New York City law firm to investigate the complaints that the two former board leaders were attempting to move forward on. The New York lawyers produced a 70-page plus investigative report that the trustees said they received Feb. 16, 2023.
The Foundation trustees said interviews with about 20 past and present Foundation employees about work conditions failed to find any basis for complaints.
The lawyers did not find “any systemic discrimination or prejudice against females or LGBTQ persons at the Woodstock Inn & Resort or the Billings Farm,” Sligar wrote at the end of a three-page letter to employees.
The defendants have never released that investigative report to the public despite multiple promises they would.
The ongoing legal battle has generated considerable national and local interest because the Foundation and Holdings play a leading role in the economic engine for the Woodstock region. About 600 people are employed through the operation of the Woodstock Inn & Resort, the Woodstock Country Club and the Saskadena Six Ski Area (formerly Suicide Six), along with the Billings Farm & Museum.
The not-for-profit Foundation was created by Laurence S. Rockefeller and Mary French Rockefeller in 1968 to provide philanthropic support to the Woodstock community and to own and operate the Billings Farm & Museum. It was set up for charitable and educational purposes.