MANHATTAN — The National Arts Club has spent more than $500,000 in legal fees since the state Attorney General and Manhattan District Attorney began investigating the nonprofit seven months ago, the club's president said in a letter to members.
The nonprofit's hefty legal fees have been spent responding to the allegations of financial misdeeds during former president O. Aldon James's reign and to lawsuits James has filed to prevent his ouster from the building, current President Dianne Bernhard, wrote to members on Wednesday.
"At this point, there does not appear to be an end in sight, given all of the complaints the James Group continues to file in an attempt to challenge the NAC’s Constitutional due process at every turn," Bernhard wrote, referring to James, his twin brother John, and their friend Steven Leitner.
Recent tax filings showed the club's annual expenses were around $2.5 million, so the legal expenses would represent nearly 20 percent of that.
A Manhattan Supreme Court Judge last month temporarily halted the eviction of the James brothers and Leitner from apartments they rent in the club, stating the club needed to create new guidelines for its internal eviction process. The ruling came after James filed a lawsuit against the club over the eviction.
The trio control six apartments in the club, down from 20, Bernhard wrote.
While these new guidelines are being hashed out, the judge did give the OK for the six apartments to be inspected to determine whether they contain any club property.
Those inspections — by the club's fine arts curator, the building's super, a maintenance worker and the club's insurance broker— are scheduled to take place on Thursday and Friday, from 9 a.m. to 5 p.m., according to the club's lawyer, Roland Riopelle.
"It will take a full two days to inspect them, given the conditions of the apartments," Riopelle said.
James, his brother and Leitner have been using club apartments to hoard antiques and other junk, which may have been bought with club money, according to an ongoing internal investigation conducted by the club.
"To date, full access to these six units has been blocked by the James Group, resulting in considerable legal costs to the NAC," Bernhard wrote to members. "As we believe significant club assets are being improperly held in the apartments, it is our fiduciary responsibility to gain entry to these units to, at a minimum, assert the NAC’s ownership — these assets may include hundreds of thousands of dollars in donated art, furniture and objects and other club property."
The club has recovered 2,000 items from the reclaimed apartments that it would like to sell, a move that has been temporarily blocked by a judge since James claims ownership of the items — including a velvet rope sectioning off a staircase at the 15 Gramercy Park South institution.
"There's significant evidence that suggests he spent a lot of the club's money on tchotchkes like this," Riopelle said.
The esteemed 113-year-old club has not slowed down its events calendar, as it readies for its first black-tie gold medal awards ceremony of the season to be bestowed next week to the renowned architecture firm Skidmore, Owings & Merrill.
But the drama between James and the board has not slowed down, either.
The club filed a motion in Manhattan Supreme Court Wednesday to show that the club's governors were within their rights to dismiss James from its board during a Sept. 22 meeting where James was reportedly "wildly disruptive."
A court order issued Sept. 28, said James was "entitled to be restored as Governor of the Board," but Riopelle claimed that entitlement did not mean James could not be removed for cause. The motion filed Wednesday was an attempt by the club to show cause for James' removal from the board.
During the Sept. 22 meeting, James "interrupted anyone who tried to speak at the board meeting, to prevent the board from conducting its business," Riopelle wrote in the court papers.
"At one point, when President Dianne Bernhard, a cancer survivor, attempted to take control of the meeting, Mr. James stated in substance, 'I hope you get sick again with your cancer'," Riopelle wrote.
"Mr. James and certain other board members purposefully disrupted the meeting, vindictively and personally attacked other board members and generally created a harassing environment that forced us to adjourn the meeting without getting any of the business of the NAC done," Bernhard said in a statement.
James had told DNAinfo last month that he wanted to "take back the club."
But Bernhard wrote to members: "For those members who suggest that we should forgive Aldon, John and Steven for their alleged wrongdoings, because of all that they have done for the Club in the past — and the Board of Governors agrees that Aldon did contribute to the fabric of this institution — the answer is simply that we cannot."
James' lawyer did not immediately respond for comment.
The parties are due back in court on Oct. 26.
