The Disabled American Veterans Chapter 40 bar and lounge on West
Magnolia Boulevard is much quieter than it used to be. Instead of
closing at 10 every night, James McDermott now shuts down at 6:30
“Once [patrons] heard the license was revoked, we’re like plague
victims,” said McDermott, the bar’s manager and treasurer.
Late last month, a judge slapped a temporary injunction on the
club, handing over control to the national Disabled American Veterans
organization, which sued the Burbank chapter over allegations of
financial mismanagement of its bar operations.
The Nov. 20 ruling by Glendale Superior Court Judge Laura A. Matz
and a pending deal with the national organization to drop its lawsuit
mean the assets of the 70-year-old club will be seized, McDermott
“Basically, they are starving us out, because without the hall and
bar, we have no money coming in,” said McDermott, who continues to
maintain that money raised is used to keep up the property and
support veterans’ charities.
The national organization has argued that the local chapter
diverted funds from veterans programs to keep the bar open. After the
national organization attempted to revoke the club’s charter, club
trustees set up a nonprofit organization and signed a lease with the
local chapter to assume operation of the bar in return for $1,000 a
Furthermore, to keep it out of the hands of the national
organization, the Burbank chapter signed away the deed to its
property, Matz said.
“Because it no longer has title to the real property, it is
questionable whether the local chapter has the right to the funds
generated by renting out the banquet hall or operating the bar,” Matz
said in her ruling.
Mark Shipow, the attorney representing the national organization,
was pleased with the judge’s ruling, and said the organization plans
to close the club’s bar effective immediately.
“Our goal here was always to protect the Disabled American
Veterans organization and do what’s right for the members,” Shipow
While the deal would allow the organization to keep its charter,
it would mean the bar and hall would have to close, McDermott said.
The injunction, he added, has left members with no other choice but
to take the deal and shut down, possibly as soon as January.
The national organization, however, could decide to keep the club
open and operate it under its own rules and regulations.
McDermott, meanwhile, says the club does not even have money to
attend an appeal hearing next year in front of the Disabled American
Veterans executive board.
“This kind of hurt real deep,” he said. “We’re combat vets here,
and all of a sudden we’re overrun. When you got nobody to help you
out, no reserves, it hurts.”