Fred Slark

Is Fred Slark in Need of a Financial Gravy Train?

or is Mr. Slark merely as he says, a simple man with a simple vision

When someone comes calling on Sun City Anthem to rescue us from imminent financial disaster, like Audra Tubin and now Fred Slark, a central question is typically asked, “why now?”

In the case of the Tubins, though, it was after the fact that the board was obligated to sanctify their takeover of Tirzo’s Bistro of what is now The Anthem View Restaurant. Now we have Fred Slark making us an offer the board no doubt will find difficult to refuse. Mr. Slark in his April 2011 letter to the board has a number of specific plans that he would like to implement that he believes would make our restaurant a success. That sounds almost too good to be true.

Although not mentioned in his letter to the board, Mr. Slark would appear to be bringing with him to the negotiating table some financial baggage that he is in need of satisfying. Some more cynical folks might wonder that his real interest in our restaurant is to provide him with an income stream that is sufficient to satisfy a substantial indebtedness he has incurred. That baggage is in addition to his offer to buy out the interests held by Tirzo Hernandez and Audra Tubin. And of course, it’s also in addition to any financial demands the board might impose on Mr. Slark as a condition of approving his takeover offer.

Insofar as the Audra and Tirzo are concerned, their financial interests in TNF Holdings may not be worth as much as one might assume given any outstanding liabilities that TNF Holdings incurred prior to appearance of Rich Hogan as the restaurant’s general manager. Mr. Hogan was able to secure agreements from our unpaid restaurant's vendors to continue their food and other restaurant related shipments, thereby preventing what would have been the imminent closing of the restaurant and stopping the accumulation of those unpaid vendor payables. However, the status of those unpaid vendor payables is unknown.

If our board members are not already aware, they should be aware that Fred Slark has a breach of contract default judgment against him for $157,588.55, dated 10 May 2010. The default judgment exists because Fred Slark does not dispute his liability to the plaintiff, a matter I confirmed from the 71 year old widowed plaintiff who made a loan to Mr. Slark. If my understanding is correct, Mr. Slark had failed to make any payments on his promissory note prior to the default jedgment. In this case, Mr. Slark continued in his failure to make any payments through at least November 2010. According to the plaintiff, the default judgment has not been met as of 11 June 2011.

As to why our board would feel the need to enter into negotiations with someone who has been unable to meet their own financial obligations to the extent indicated by the district court’s judgment is anyone's guess. Is it really in our best interest to facilitate Fred Slark’s interest in generating a cash flow from our restaurant's gravy train that he obviously needs in order to satisfy a substantial legal judgment that he cannot afford?

Would not Sun City Anthem be better served if following a real search effort of restaurant operators we could obtain an operator who can demonstrate the experience and the financial wherewithal to successfully run our restaurant and catering operations? While that would seem obvious, that has not been the course taken by recent boards. Relying on the promises of someone who has demonstrated his inability to keep his own financial house in order would not seem to be in Sun City Anthem’s best interest, but then again, perhaps as bottom feeders we have little choice in the matter.

Actually, we have been ill served by a management-challenged owner like Tirzo Hernandez, by an experience-challenged owner like Audra Tubin, and apparently now by a financially-challenged owner like Fred Slark. Unfortunately, at least under a lease type arrangement, we are forever destined to be bottom feeders when it comes down to selecting a restaurant operator. While it might sound nice, even worthwhile, to seek a worthy and viable operator to run our restaurant, that prospect appears to be beyond Sun City's reach—it simply is not going to happen.

Forgotten by most homeowners is the legacy left us by a former resident and board candidate, John Briggs. Mr. Briggs thought the board and prospective lessees should be aware that Nevada law required association leases first be approved by the homeowners. As the theory goes, the absence of such approval placed any such lessee in potential legal jeopardy, despite any assurances to the contrary offered by our legal counsel, John Leach.**

Any restaurant operator contemplating a substantial investment understandably might be leery of entering into a lease arrangement where the validity of that lease might be questioned and subsequently ruled invalid. As a result, all Sun City Anthem boards since Briggs might be equally leery of seeking interest from bona fide restaurant operators who could easily afford such an investment and as a result could have more to lose should legal obstacles arise. As a result, we are left to "select" from those who are less than the best or, as some might bemoan, we are left with the more wanting or needier persons to choose from.

This unwanted dilemma that has been repeatedly forced on us might suggest that there is some benefit to be gained by considering anew other restaurant management options.

Ron Johnson, 12 June 2011, rev 13 June

** One assumes that a lease can be written to indemnify the lessor from any such untoward liability or financial loss in that unlikely event. But that begs the question of whether the association would want to obligate itself under such less favorable conditions.

Note: A special thanks to Dick Arendt and others for their assistance in the preparation of this article.