Court Bars Group From Control of Fabulous Inns

The Fourth District Court of Appeal on Friday granted an emergency stay that delays a lower court order that would have allowed the ousted management of Fabulous Inns of America to take control of the hotel company on Sunday.

Superior Court Judge G. Dennis Adams had ordered that the directors representing the ousted management be seated on May 12. Those directors were elected last summer during a special shareholders meeting that current management contended was invalid.

The appellate court ruling will be in effect until at least May 15, when attorneys for the ousted management are expected to file a response.

Chairman Jeffrey Krinsk said he is “confident” that the appellate court will “vindicate the shareholders’ interests” and continue the stay.

Krinsk is a former dissident shareholder whose allegations of conflicts of interest by the ousted management three years ago led to the battle for control of the small but profitable Mission Valley hotel company.

Attorneys for the ousted management group could not be reached for comment.

Friday’s order was the latest in a series of court actions involving the company.

Ruled Meeting Was Valid

After 10 weeks of hearings, mediator C. Hugh Friedman last month recommended that the results of the disputed shareholders meeting be invalidated and that a new election be held.

Earlier this week, Adams overruled Friedman’s finding and said the meeting was valid. He ordered the directors elected last summer to assume control but called for a new election to be held July 10.

However, Adams stipulated that members of the ousted management--including former Chairman Henry Maxwell, former President Walter L. Palmer and former director and Chairman Ernest M. Stanley--be barred from serving as Fabulous Inns directors or executives for at least four years.