Unpaid Preakness fest creditors tighten belts, wait and worry

June 29, 1995|By William F. Zorzi Jr. and Michael James | William F. Zorzi Jr. and Michael James,Sun Staff Writers

In yesterday's editions, the name of Barry F. Scher, co-chairman of Maryland Preakness Celebration Inc., was misspelled.

* The Sun regrets the error.

The organization that ran Maryland's Preakness Week events has left scores of unpaid creditors across the state and beyond -- including florists, caterers, balloonists, security guards, musicians and television stations who, altogether, are owed nearly $1 million.

The group didn't even pay the promised $100 prize to the runner who won its 5-kilometer footrace.

Maryland Preakness Celebration Inc. did pay nearly $750,000 in bills associated with its weeklong series of events May 12-19, which included street festivals, concerts, a ball, a parade and a hot-air balloon launch.

FOR THE RECORD - CORRECTION

But the nonprofit corporation still has $999,285 in debts to more than 120 businesses, individuals and government offices, some of which were paid with checks that bounced or checks on which payment was stopped.

The unpaid bills are creating a hardship for many small-business owners and others involved with the festivities -- and they have tarnished the reputation of one of the state's premier attractions. Maryland Preakness Celebration Inc. is a separate entity from the famous horse race on which its events are centered.

A list of creditors obtained by The Sun indicates that the vendors still unpaid for services for Preakness Celebration events include the caterer who provided an evening of cocktails and hors d'oeuvres, the small rental business that supplied tents for concerts at Rash Field and Oregon Ridge, and the artist who was commissioned to depict a key black-tie event that capped the week of festivities.

The group also failed to make good on a $30,000 check presented ceremonially to the Maryland Special Olympics during event at Rash Field.

"I don't know what's going on, but it's very aggravating and very disappointing," said Linda Johnson, operations manager for Kemp Balloons of Selbyville, Del., which is waiting for $10,000. The company provided 9-foot-high advertising balloons for a concert.

Ms. Johnson said she asked for a deposit check for $4,000 up front. "They Federal Expressed us a check, all right. But it was no good," she said. "I don't know what to do. We've paid our employees. We need money."

Legally, the debts are the responsibility of Preakness Celebration's volunteer board, which is made up of 27 business and civic leaders from around the state. The board has blamed the problems on its director, Donna Leonard, although members acknowledge that they gave her full authority to write checks and contract with vendors with little or no oversight.

Ms. Leonard, 35, was suspended from her job this month when the board was besieged by calls and threats from angry vendors who had not been paid. The board also announced June 14 that it had referred the matter to the Maryland attorney general's office for possible action.

The board is still assembling records to turn over to that office, and the attorney general has not decided whether the matter warrants a state investigation.

Charles E. Rosolio, an attorney for Ms. Leonard, said this week that he and his client are "working with the board to determine and verify the payables of the creditors."

"The board did provide us with a list of their concerns, all of which appear to be in the area of her business judgment or business practices," Mr. Rosolio said. "They have not provided us with any information that she did anything improper or illegal that would have provided her any personal benefit."

Meanwhile, the board is trying to develop a payment plan -- and to figure out how to come up with the money to pay the debts. The group has spent virtually all of the money from its $750,000 budget, which came largely from corporate contributions and $125,000 in state and city grants.

"We're still developing a plan and hope to finalize it by the next board meeting July 23," said Barry F. Sher, one of the board's co-chairmen.

Mr. Sher would not be specific about the plan, but people familiar with the board's plight said it could include proposals for partial payments and considering the goods and services provided as tax-deductible contributions in lieu of payment.

Many of those waiting say they need the money.

Thirty-thousand dollars "is a large contribution," said Miriam Weinstein, director of sports programs for Maryland Special Olympics, which serves nearly 7,000 children and adults who have developmental disabilities.

If the promised donation does not come through, she said, "it will be a significant loss to our athletes and our sports programs. If we hear that we're going to get a contribution, it's designated for a certain program."

Elliot Zulver, the owner of Taylor Rental in Timonium, supplied about 20 "monster-sized tents," 2,500 folding chairs and 200 tables for the concerts at Rash Field and Oregon Ridge. Some of those items he rented from another company.

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