A judge Friday decided to delay a decision on whether to close the
Burbank chapter of the Disabled American Veterans club because of
alleged financial mismanagement of its bar operations.
The injunction being sought by the national organization of the
Disabled American Veterans will close the club after 70 years in
town. And it will force its local trustees to turn over the club’s
assets to the national organization, which is claiming in a lawsuit
that the local trustees mismanaged bar and lounge funds.
Glendale Superior Court Judge Laura A. Matz decided to take more
time considering whether an injunction was warranted in the case,
which she called “awful.” She was perturbed that the litigation would
hurt disabled veterans the most, she said.
“I think something terrible is going on here,” she told attorneys
from the national organization and the local chapter, adding, “the
issues raised here are extraordinary.”
As part of the lawsuit, attorneys for the national Disabled
American Veterans organization want the injunction in order to seize
Burbank Chapter 40’s assets while the lawsuit proceeds and to
investigate where revenue was going. They also want to revoke the
charter of the property at 1115 W. Magnolia Blvd.
The local chapter’s trustees can argue their case in front of the
national executive board in February in Virginia. But Matz said she
might not have any authority to allow the national organization to
take the assets.
After the national organization attempted to revoke Chapter 40’s
charter, the chapter’s trustees transferred ownership of the property
to members-at-large, essentially creating a whole new nonprofit with
veterans as members, an act that the national organization’s
attorneys said was a violation of bylaws.
Under the new nonprofit, the club’s bar, a major source of income
for the club, was still operating under a liquor license granted to
the DAV, not the new club.
In the lawsuit, national DAV attorneys said the transfer was a
“scheme to deprive members of benefits” after the national
organization began investigating the bar and lounge’s “deteriorating
financial condition” and lack of funding toward disabled veterans
programs. “You can’t have officers of a chapter, who have decided to
not follow the rules of the chapter, continue running the chapter,”
the national organization’s attorney, Mark S. Shipow said, adding
that officials want to find out happened to allegedly siphoned bar
William Ramseyer, the local chapter’s attorney, argued that the
club’s bylaws follow the national bylaws with the exception of when
it comes to dissolving the chapter.