BLOOMINGTON — The city's civil court action alleging financial misconduct by the firm that managed the city-owned arena for a decade will move forward, a judge ruled Friday.
The counterclaim filed in April against Central Illinois Arena Management alleges CIAM and its owner, John Y. Butler, withheld money from the city through a scheme that included billing the city for the full price of food and beverages after the items had been discounted to performers and customers at what was then U.S. Cellular Coliseum.
The city's counterclaim came in response to a lawsuit filed by Butler in March against the city for at least $67,175 in commissions the city allegedly failed to pay him for sales of advertising and premium seating at the 7,000-seat, city-owned venue now called Grossinger Motors Arena.
Butler and four other former management officials also face criminal charges related to alleged mishandling of Coliseum funds. The accusations include theft, wire fraud, money laundering and tax-related offenses.
In her ruling, Judge Rebecca Foley denied a motion by CIAM lawyer Travis Quick to dismiss the city's counterclaim. Quick argued the city's fraud allegations against Butler, CIAM and related company BMI Concessions were legally insufficient.
"It's not enough to say there's some fraud somewhere," said Quick.
Butler and his firm were hired to oversee the Coliseum under a contract that gave him "tremendous power to act on the city's behalf," said the city's lawyer Greg Moredock. Butler and CIAM exceeded that authority to the city's financial detriment by using taxpayer funds for his personal use, the city has alleged.
In a separate ruling, Foley let stand a portion of an affirmative defense put forth by the city in response to Butler's lawsuit. The city will be allowed to argue that Butler was paid all the money he was owed in commissions.
A $247,000 payment to CIAM by the city included the $67,000 the former manager is seeking, Moredock argued.
Foley granted Quick's request to strike the city's argument that CIAM could have minimized its losses by canceling sponsorship contracts that extended beyond the end of CIAM's contract with the city.
An Oct. 4 hearing is set review the status of the lawsuit.