Dover Must Pay Severance

A Delaware Superior Court judge has ordered administrators of the Schwartz Center for the Arts in Dover to pay almost $18,000 to a former director who was forced out after burying the venue in a mountain of debt.

James Casey, former executive director of the Schwartz Center, filed a lawsuit in 2004 seeking to force directors of the building to make good on a severance package negotiated in December 2003.

Judge James Vaughn Jr. ruled June 21st that the theatre owed Casey about $32,400 under the terms of his severance agreement. Vaughn lowered that amount to just under $18,000 – plus interest since June 2004 – after accounting for Casey’s final paycheck, unemployment benefits and deductions for missing equipment and expenses.

Vaughn said he would formally enter a judgment against the defendants if they did not pay Casey within 60 days.

Casey was hired in April 2002 at a salary of $75,000, with the promise of a $10,000 bonus at the end of the first fiscal year if the Schwartz Center was operating at a profit.

The former exec got the bonus – and a $10,000 raise – even though the theatre finished the fiscal year ending in June 2003 with an operating deficit of almost $1 million.

Delaware auditors conducted a review of the venue at the request of the attorney general’s office in 2004 and concluded the board of directors failed to exercise proper oversight of the theatre’s finances.

“There is no evidence, of any weight, that plaintiff attempted to conceal any material fact from the executive committee concerning the center’s financial conditions,” Vaughn ruled.

The judge rejected the defendants’ arguments that Casey’s severance pay should have been based on a salary of $75,000 and that it should have been reduced by the $10,000 bonus.

“The facts that his salary had been increased to $85,000 and that the bonus had been taken were known or should have been known to the center representatives who negotiated the resignation,” Vaughn wrote.

Vaughn also rejected the defendants’ claim that Casey breached the confidentiality terms of the severance agreement by publicly stating that he had filed for unemployment benefits. If venue officials abided by their obligation to provide Casey a schedule of severance payments, he might not have filed for unemployment, the judge wrote.

A Schwartz Center attorney declined to comment on the situation at press time.