A Roanoke Rapids businessman filed a lawsuit Thursday against entertainer Randy Parton and his business associates alleging they fraudulently obtained public money to build a theater in the city.
[Complete copy of the lawsuit]
The North Carolina Institute for Constitutional Law, a nonprofit public-interest legal organization based in Raleigh, is representing businessman Jim Garrett at no charge and filed the suit in Halifax County.
At a press conference at the institute’s headquarters in Raleigh, Jeanette Doran, a lawyer for the institute, said Parton and his associates were involved in a “complex multiyear fraudulent scheme.” Parton, of Sevierville, Tenn., is a younger brother of country music star Dolly Parton.
Roanoke Rapids borrowed $21.5 million to build the Randy Parton Theatre and last year turned it over to Parton to operate. His show debuted in July, but attendance was low.
Unhappy with Parton’s management, the city severed all ties with Parton earlier this year and renamed the facility the Roanoke Rapids Theatre. The city is struggling to find shows and management to make enough revenue to repay the debt on the 1,500-seat theater. The city recently raised property taxes to help offset losses from the project.
Garrett filed the action in Superior Court on behalf of himself, the city, and its taxpayers. He is asking the court to declare the original agreement between the city and defendants void because it was the product of a conspiracy and fraudulent conduct by Parton and his associates.
He wants the court to appoint a person to calculate all losses incurred by the city and for the court to order Parton and the others to reimburse the city for those losses.
The lawsuit alleges that Parton, former economic development official Rick Watson, lawyer Ernest Pearson, and various business entities they were involved in, began ”scheming” in 2004 to fraudulently lure a city into a theater project so they could profit at the expense of taxpayers. To carry out their plan, the suit alleges, they made false statements, withheld material facts, breached their fiduciary duties to taxpayers, and ignored substantial conflicts of interest.
The suit alleges that Parton and his associates were “dealing with pervasive conflicts of interest surrounding the scheme,” and withheld important details from the public. The suit specifically claims that defendants knew or should have known that “Parton had no management experience, that he had a reputation for unreliability in the entertainment world and that his history of alcohol abuse was a continuing problem.”
The lawsuit states that Watson was the business manager for Randy Parton’s company at the same time he was recruiting Parton on behalf of North Carolina. Watson was president and CEO of the state-funded Northeast Commission, a regional economic development organization that has its headquarters in Edenton, when the Parton Theatre project was proposed.
Records show Watson began working with Parton in August 2004 or before, in his capacity as an economic developer. Watson has acknowledged that he was responsible for the theater concept and for recruiting Parton to participate.
Pearson, a lawyer based in Cary, served as legal counsel to the Northeast Commission at the same time he was being paid by Parton and the city for legal work on the project. Both Watson and Pearson obtained ownership interests in Moonlight Bandit Productions and the other companies set up to operate the theater.
“We will be representing Randy Parton and the Moonlight Bandit Companies, and we look forward to defending these claims,” Parton’s lawyer, Nick Ellis, told Carolina Journal.