Q Funding calls for resignation of Cedar Fair board members over Jack Falfas controversy

Posted Thursday, March 24, 2011 11:37 AM | Contributed by Leland Wykoff

[Ed. note: The following is an excerpt from a press release. -J]

Q Funding III, L.P. and Q4 Funding, L.P., which with their affiliates own approximately 18 percent of Cedar Fair, L.P.'s units, sent the following letter to the Cedar Fair, LP (NYSE: FUN) Board of Directors today. The letter calls for the resignation of seven Board members who were involved in mischaracterizing the supposed "resignation" of the company's chief operating officer, Jacab "Jack" Falfas, last year. An arbitration panel recently upheld Mr. Falfas' contention that he was wrongfully terminated and ordered the company to reinstate him to his previous position and to pay back pay and other benefits due to him under his employment agreement.

Read the entire Q press release on PR Newswire.

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Thursday, March 24, 2011 12:02 PM

Wow, I didn't know the outcome of the Falfas issues...

Thursday, March 24, 2011 12:05 PM

I still can't understand the "informal" letters that Q writes. They get the point across but it sure does not appear to be very business like.

Thursday, March 24, 2011 12:11 PM

My concern is that this offers some weight to my issue months ago: That someone had to be lying about the circumstance under which Falfas left. I'd love to know more about this alleged arbitration.

Thursday, March 24, 2011 12:11 PM

I've never heard of a wrongful termination case resulting in a reinstatement. There's usually a financial reward.

Thursday, March 24, 2011 12:14 PM

@Shades, yeah, the whole "Shame on YOU!" screams to me "Neener neener neener". It's kind of annoying.

@Jeff, it appears that there was more to the story. It says that Falfas was ordered back, wonder what the status on that is. I tried to click on the photos of the arbitration info, but can't without a PR Newswire login.

As annoying as Q funding has become with endless unprofessional letters, it looks like the board and likely Dick have made a pretty big mistake with the way they handled Jack. I guess Jack was a 'yes man' up until the point that someone told him No. Now I wonder if he does come back how the dynamics of his job and interactions would be different...

Thursday, March 24, 2011 12:45 PM

The two images opened fine for me, but even the larger version is pretty small and I haven't tried to read it yet. Hopefully it's not session-specific and I can link directly: page 1 and page 2.

Thursday, March 24, 2011 12:50 PM

This is a sticky wicket for Cedar Fair.

Misleading Unitholders, along with the SEC in filings, is potentially a serious crime.

A recent decision from the US Supreme Court concerning the failure to disclose to shareholders customers loss of the ability to smell after using a nasal spray product, underscores the potential for liability when communicating with company investors.

The Jack Falfas episode suggests, once again, Cedar Fair suffers from a captured board unable or unwilling to "direct" the company.

Unitholders were wise to scuttle the Apollo merger and demand better management for our company. Perhaps Mr. Falfas will return to CF as the new CEO upon Mr. Kinzel's retirement.

Thursday, March 24, 2011 12:51 PM

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Last edited by Dutchman, Thursday, March 24, 2011 1:01 PM
Thursday, March 24, 2011 1:09 PM

If it's new management that people want then how could Falfas be the right choice?

Thursday, March 24, 2011 3:31 PM

Well, the truth came to the surface. Jack was pretty adamant in public (and amongst his friends and family) that he did not resign. I would pretend to be surprised at Dick's seemingly uncaring ignorance of the facts but that would suggest that he didn't typically operate this way.

While I like Jack, if asked before all of this if I thought he was the right person to succeed Dick I would have said no. Be that as it may, he didn't deserve what has transpired over the last 8 months. Kinzel is such a poor manager of people that I'm not sure anyone within the company would be better suited to run the company than someone from the outside.

One has to believe that Dick lied directly to the Board based on the way the Board handled all of this. If that isn't enough for them to separate him from his contract then I don't know what is and it is further evidence that they are and have always been puppets to Kinzel.

And before the Kinzel supporters go haywire over what I wrote I will reiterate...again...that I still believe Kinzel's role in the company's achievements of the past two decades is remarkable. But, the way he is wrapping up his career, particularly over the past five years or so is just sad. And, it is a real disservice to the rest of the Cedar Fair folks.

Thursday, March 24, 2011 3:39 PM

What Kinzel supporters are there on here? ;)

Thursday, March 24, 2011 5:56 PM

Well someone's head better roll for this! And with the information we currently have I think it should be Kinszel. Either he lied to the board as to what happened, spearheaded a false story, or at the very least didn't do any research at all before issuing a statement to the press.
No matter what (and barring any new information) he screwed up badly and at this point I do think it would require his job as CEO of the company at the least, if not his board position also!

Saturday, March 26, 2011 1:55 PM

On one hand it seems like Q Funding is constantly writing these letters complaining about one thing or another. On the other hand, they are large enough and visible enough that when they write letters, they get noticed. They may be putting into writing what a lot of smaller unitholders are thinking. For all we know, the Board receives hundreds of similar letters each year. But since it's just some geezer with a few hundred shares, the press isn't interested, and the Board can ball them up and practice playing corn hole with them.


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