Novelli Loses Control of Resort Company
Embattled businessman Ray Novelli has again lost control of one of his major resort companies after a former employee told a federal court that Novelli has been siphoning corporate funds for his own use.
Finova Capital Corp. in Phoenix, unsettled by Novelli’s financial problems in myriad enterprises, won a federal court order in Arizona to get a receiver appointed over All Seasons Resorts Inc., a chain of membership-only campgrounds. Finova holds a $2.8-million loan on three of the campgrounds.
Novelli vowed Friday to win back control of All Seasons Resorts, and accused the former employee of lying. The employee was fired, Novelli said, after executives found that at least $48,000 was missing from the company.
In an unrelated case in June, Novelli succeeded in overturning a similar court order placing All Seasons in the hands of a receiver.
“We’ll overcome this one too,” Novelli said. He said he hopes to go back to court next week to show that Finova improperly relied on false testimony from the former All Seasons employee.
A Finova executive confirmed that it obtained a U.S. District Court order Aug. 29 for the appointment of a receiver but wouldn’t comment further.
The former employee testified that Novelli has been failing to pay creditors, falsifying corporate books and diverting funds to himself to support a luxurious lifestyle. Novelli wasn’t notified of the hearing in Phoenix.
Novelli, who denied any wrongdoing, said he has asked the FBI to investigate the suspected theft, asserting that the amount could grow to more than $200,000. He said he contacted the FBI before the former employee testified. The FBI wouldn’t comment.
Novelli, who last spring closed Presidential Air, an upstart airline based in Long Beach, operates a number of diverse companies.
His biggest business consists of vacation and resort companies catering to the recreational vehicle set. He said he has nearly 100,000 members who use 31 campgrounds that his resort firms own or lease nationwide.
About a dozen campgrounds operated by his First Nationwide Resort Management Inc. filed for bankruptcy protection last spring.
Then in June, Newport Beach lawyer John Barclay, owed more than $60,000 by Novelli for unpaid legal bills, won a court order putting a receiver in control of All Seasons, Presidential Air and other Novelli companies. Novelli succeeded in getting that order overturned.
