Court Will Hear Fabulous Inns Appeal

The Fourth District Court of Appeal said Tuesday that it will hear an appeal by the current management of embattled Fabulous Inns of America to block a lower court order that would have allowed the company’s ousted management to resume power.

The appellate court decision means that the current management of the small but profitable Mission Valley hotel company will remain in control during the long appeal process. However, the court also upheld a previous preliminary injunction limiting corporate expenditures and prohibiting the payment of legal fees related to the battle for ownership control.

Although his faction will remain in control during the appeal process, Chairman Jeffrey Krinsk said he is “not entirely pleased” that the injunction limiting expenditures remains in place. “But I understand the reticence of the court to take more definitive actions.”

The injunction limits expenditures to routine, cost-of-doing-business expenses.

‘Investment Opportunities’

Krinsk said that, if he were not bound by the injunction, he would proceed with several “investment opportunities.”

“We have some things on the burner that, if we were unleashed, would substantially help the shareholders’ stock value,” he said.

Attorney Gary Elster, representing the ousted management faction led by former Chairman Henry Maxwell and former President Walter Palmer, would not comment on the appellate court’s decision.

Elster said, however, that it could be more than three months before the court renders a final decision on which side will emerge victorious in the three-year seesaw battle for Fabulous Inns.

The appellate court ruling Tuesday also cancels an order by Superior Court Judge G. Dennis Adams that a new board of directors election be held on July 10.

Adams made his ruling earlier this month after 10 weeks of hearings that examined the ownership dispute. The hearings were mediated by attorney C. Hugh Friedman.