Cedar Fair responds to Q allegations over separation of former COO Jack Falfas

Posted Thursday, March 24, 2011 6:14 PM | Contributed by Jeff

[The following is an excerpt of a press release. -J]

Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today issued the following statement regarding a news release issued by Q Funding III, L.P., Q4 Funding, L.P. and Geoffrey Raynor (“Q Funding”) earlier today:

“Based on the actions of Mr. Falfas on June 12, 2010, the Company and its Board of Directors stand behind their conclusion and initial reporting to the Securities and Exchange Commission that Jack Falfas resigned from his position with Cedar Fair Entertainment Company.

Mr. Falfas has disputed the Company’s position and chose to exercise his right to a confidential arbitration hearing pursuant to his contract with Cedar Fair. An arbitration panel recently ruled 2-to-1 in favor of Mr. Falfas. In no way did this initial decision conclude that the Company or its Board misled unitholders. The Company is convinced that the arbitrators exceeded their authority by creating a remedy not legally available to Mr. Falfas under his contract with Cedar Fair. The Company is seeking the Court’s review of the arbitration award, as it is entitled to do. While the Company disagrees with the conclusions reached by this arbitration panel, it will meet its legal obligations, if any, to Mr. Falfas, as they ultimately may be determined. The Company will also continue to honor the confidentiality of Mr. Falfas’ contract and the arbitration hearings and will have no further comment regarding this personnel matter.”

Read the entire press release from Cedar Fair.

Thursday, March 24, 2011 6:59 PM

Ok I don't see the problem here, either he was fired (the company decided they didn't want him to work there anymore) or he quit (He decided he didn't want to work there anymore). So which one is it?

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Thursday, March 24, 2011 8:45 PM

Can anyone tell if the arbitration was binding or non-binding? I am assuming that the line "will meet its legal obligations" implies that the decision, if upheld, requires implementation by Cedar Fair.

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Thursday, March 24, 2011 9:57 PM

Maybe he was given the choice of resigning or being terminated and to save face he took the resignation option. He along with the arbitration panel could see that as being "forced out".

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Thursday, March 24, 2011 10:10 PM

Welcome to amateur hour. The Minor Leagues of business. Cedar Fair and SeaWorld Parks.... asleep at the wheel. One idiotic "legal" decision after another without any experience or expertise to help them through it.

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Thursday, March 24, 2011 10:49 PM

^Could the lack of professionalism be related to the result of an entry level employee without any professional training rising to the top of a company and being left in charge for far too long? (Kinzel)

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Thursday, March 24, 2011 11:08 PM

Talk about splitting hairs.

Cedar Fair in its statement seems to agree with the arbitration panel that Mr. Falfas was terminated and did not resign.

What Cedar Fair disputes is the action imposed: "...convinced that the arbitrators exceeded their authority by creating a remedy not legally available to Mr. Falfas under his contract with Cedar Fair. The Company is seeking the Court’s review of the arbitration award, as it is entitled to do."

This is a complicated way of challenging the order to place Mr. Falfas back in his COO position and restore his salary. If the arbitration panel finds, as it did, Jack was terminated unjustly what other remedy could the panel order but a back to work order?

It would seem Cedar Fair would rather buy-out Mr. Falfas remaining contract than have him back at work. Here is the tell, "While the Company disagrees with the conclusions reached by this arbitration panel, it will meet its legal obligations, if any, to Mr. Falfas, as they ultimately may be determined."

Cedar Fair seems to be angling for a monetary judgment over the back to work order. No doubt they will seek a confidentiality agreement as well as Jack's repudiation of the findings of the arbitration panel. That would fix any SEC filing violations.

To get clarity on this issue simply ask yourself this, "If COO Falfas resigned as Cedar Fair claims, then why would they not be thrilled to welcome him back to the fold?"

The reasonable answers seem to sound something like this, "They will not take him back because they terminated him."

If it had gone down as Cedar Fair insists, they would be delighted to have him back on board.

Last edited by Leland Wykoff, Thursday, March 24, 2011 11:10 PM
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Thursday, March 24, 2011 11:10 PM

The gossip I heard last summer was that Jack said to Dick "Well if you don't like how I do things then I'll just quit."

Falfas had supposedly made these kind of sarcastic remarks in heated discussions before so he was rather upset when Kinzel accepted his "resignation"

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Thursday, March 24, 2011 11:40 PM

CPJ said:
Welcome to amateur hour. The Minor Leagues of business. Cedar Fair and SeaWorld Parks.... asleep at the wheel.

Why would you lump SeaWorld parks in with Cedar Fair? Seems like a disservice to SWP.

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Friday, March 25, 2011 8:09 AM

End result: Jack doesn't come back but is going to walk away with a big chunk of change. Again, Kinzel will have put the company in a compromising financial position just as he did with the potential sale of the company that resulted in a significant cash penalty.

The Board, being the most obvious lapdogs to this CEO, will go on as if he can do no wrong.

It is a real shame that a once well respected leader in the industry is going out like this...and by that I mean Kinzel. I suspect Jack's standing in the industry will be unshaken as just about everyone except the Board can read between the lines.

And yes, I didn't understand the Sea World slam either.

Last edited by wahoo skipper, Friday, March 25, 2011 8:10 AM
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Friday, March 25, 2011 10:48 AM

I know a number of people that have worked (and some that still do work) for the San Diego park. I have heard some really strange stories about their management style, so I can see where that come from. That and my experiences trying to get a job there..........

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Friday, March 25, 2011 12:16 PM

At least SWP gives employees cell phones when necessary, something that Cedar Fair (and InBev, when they still had Busch) does not.

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Friday, March 25, 2011 12:51 PM

Jeff said:
At least SWP gives employees cell phones when necessary, something that Cedar Fair (and InBev, when they still had Busch) does not.

Glad you brought this point up. Supposedly Cedar Fair has a corporate marketing person whose responsibility it is to work on partnerships with other corporations. How friggin hard could it be to form an exlusive partnershio with Sprint/AT&T/Verizon/etc. to be the "official" communications provider at Cedar Fair parks with the inclusion of stipulated free service for certain positions? There are untold opportunities for park guests in such a partnership as well. Isn't this a no brainer?

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Friday, March 25, 2011 1:12 PM

Dick is too busy worrying about how to bring the brass rings back the the merry-go-rounds. The only technology that guy embraces is in ride manufacturing.

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Saturday, March 26, 2011 5:21 PM

Jeff said:

Why would you lump SeaWorld parks in with Cedar Fair? Seems like a disservice to SWP.

Recent visits to the parks, when's the last time you were there?

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Saturday, March 26, 2011 5:22 PM

Jeff said:
At least SWP gives employees cell phones when necessary, something that Cedar Fair (and InBev, when they still had Busch) does not.

Not if you don't know who to call or what the number is.

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Saturday, March 26, 2011 5:25 PM

wahoo skipper said:
And yes, I didn't understand the Sea World slam either.

I was at SeaWorld Orlando on Wednesday, when were you last at a SeaWorld park?

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Saturday, March 26, 2011 6:27 PM

Holy triple posting, Batman!

I had a 2010 Fun Card, so I was there several times as little as 4 months ago, and I have absolutely no idea what you're getting at with those remarks. Customer service was about what I expected, being little more than an entertainment zoo that happens to have a few rides (as well as experiences at the old Ohio SW). From what little I know about their management/corporate scene, I would say your remarks don't even begin to be in the ballpark of this discussion as far as management goes.

Last edited by maXairMike, Saturday, March 26, 2011 6:28 PM
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Saturday, March 26, 2011 9:36 PM

CPJ: You didn't answer the question. Why would you lump in SWP with Cedar Fair?

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Saturday, March 26, 2011 11:04 PM

Because he was JUST THERE WEDNESDAY!!!!

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