DEFAULT IS NOT IN OUR STARS, BUT IN OURSELVES: Part 23 — That’s One “Grande Pesca Storia”! “Wolf Of Washington Avenue” Mike Bacigalupo Claims Personal Liability Exemption In Bay City State Theatre’s “Springfield Swindle” Lawsuit (What About Those Missing Fishing Tournament Donations?)
“According to Michigan State Law 50.218, furnishing a check that does not have sufficient funds is a serious crime. Should you fail to remit the Balance due, our client will be entitled to exercise all legal and equitable rights and remedies available, including the right to hold you personally liable for all damages incurred as a result of your breach.”
September 6, 2023; letter to Michael Bacigalupo from William Morris Endeavor Entertainment, LLC (Agent for The Springthorpe Brothers Corp f/s/o Rick Springfield)
In his recent response to the civil action filed February 6, 2024 on behalf of Rick Springfield against the Bay City State Theatre, former Chief Operating Officer, Mike Bacigalupo, revealed his defense: hiding behind the “corporate veil”.
However, using a corporation or nonprofit for some illegal activity or to perpetuate a fraud could result in a court “piercing the corporate veil” and holding an officer personally liable for losses sustained.
The limited liability protection offered to nonprofit officers is so they won’t be held personally liable for debts should the entity be sued by its creditors.
However, creditors may assert claims that the nonprofit corporation is really the arm or instrumentality of the controlling members — or a member.
The court may then be asked to “pierce the corporate veil”, and hold those members (for example, Bacigalupo) personally liable.
In my opinion, this case may be headed in that direction.
Here’s why: as I reported on January 6, 2024, Mike Bacigalupo raised $47,500 from four local business entities to sponsor Major League Fishing’s Bass Pro Tour stop in Bay City.
The tournament took place along the Saginaw River from August 1–6, 2023.
Mike Bacigalupo accepted the money, but never paid the Kentucky-based Major League Fishing, LLC.
Instead, in my opinion, Bacigalupo could have easily used those fishing tournament donations to pay Springfield’s contractually-obligated $48,750.00 performance deposit.
The timing supports that theory.
According to the February 6, 2024 civil action filed in Bay County’s Circuit Court against Michael Bacigalupo and the State Theatre of Bay City/Bay County by attorneys representing Springfield, Bacigalupo was late with an agreed-upon deposit of $48,750.00, which was due to Springfield “on or before June 26, 2023.”
Bacigalupo later paid the deposit “on or about” July 10, 2023.
The deal included a “flat guarantee compensation price” of $97,5000, plus reimbursements for other expenses including ground transportation, hotel accommodations and meals.
Under the terms of the agreement, a “deposit was due to Plaintiff in the amount of $48,750.00 on or before June 26, 2023.”
Bacigalupo was late with the cash; he paid the deposit “on or about” July 10, 2023.
In his answer to the February 6, 2024 complaint filed by Braun Kendrick Finkbeiner P. L. C. (the Saginaw law firm representing Rick Springfield and his “Springthorpe Brothers Corp.”), Bacigalupo admitted he had told Springfield’s booking agency “that there was an issue with an account of the State Theatre being breached resulting in problems with funds being released from the account.”
In addition, Bacigalupo did not dispute telling the booking agent that “the issue would be resolved soon, and that Plaintiff could expect a wire payment for the remaining balance.”
Bacigalupo’s March 1, 2024 response detailed a list of Special And/Or Affirmative Defenses — including this one:
“Plaintiff fails to state a claim upon which relief can be granted/Plaintiff’s claim is barred; as Defendant Michael Bacigalupo is not individually/personally liable for his acts as the Chief Operating Officer of the State Theatre pursuant to MCL 450.2209 Sec 209(1)(e) and pursuant to the State Theatre’s Articles of Incorporations.”
“Piercing the corporate veil” is a legal phrase that describes the owners of a corporation or a nonprofit losing the limited liability that having a corporation or a nonprofit provides them.
When this happens, the owners’ personal assets (or an officer, in the case of a nonprofit) can be used to satisfy business debts and liabilities.
Note that this “veil” concept doesn’t apply only to corporations.
It also applies to nonprofits, like the State Theatre of Bay City.
And can you really call yourself a bona fide nonprofit when you haven’t filed your annual IRS Form 900 since the fiscal year ending December 31, 2020?
Three years behind…sounds fishy to me.
