Senior VP will face contempt if she fails

By Bob Peryea


A Walworth County Circuit Court judge ordered a Cove of Lake Geneva executive Thursday to produce all documents requested by a court-appointed receiver or face six months in county jail for contempt of court.

Judge John R. Race gave Chandra Webster, senior vice president of Geneva Hospitality, one week to produce documents that will show an overall accounting of money received from condominium owners and disbursed to PNC Bank.

Geneva Hospitality is the management company that ran the Cove on behalf of the Cove Condominium Association and is being sued by PNC Bank for defaulting on a $1.65 million construction loan. The loan was used to build banquet facilities at the hotel.

Webster, who was deposed early this month, asserted her Fifth Amendment rights to not incriminate herself throughout the deposition.

Toward the end of Thursday’s hearing, Webster’s attorney, Jerome Buting, reminded the judge that he could compel Webster’s testimony, if he granted her immunity from prosecution.

“If I’m going to do that, I want the U.S. attorney for this district in this court,” Race said.

Race opted to move forward with the finding of contempt, which he had imposed on Webster in January, and allow her one final opportunity to remedy the con-tempt.

Webster will likely need to provide a complete accounting of the whereabouts of all the money that was accepted by Geneva Hospitality for the PNC Bank loan, as well as during the final four months that Geneva Hospitality operated the Cove.

Attorney Michael Polsky, the receiver who took over after the court ordered that Geneva Hospitality no longer manage the hotel, said hundreds of thousands of dollars might be missing from payments condominium owners payments on the loan to Geneva Hospitality.

Geneva Hospitality’s attorney, David Williams, repeatedly asserted that Webster had already surrendered all the necessary documents.

The court disagreed and entered the contempt order.

Nearly 100 property owners made payments of $100,000 each – about $1 million – to Geneva Hospitality to be forwarded to PNC Bank to repay the loan. But Geneva Hospitality has not provided accounting that shows the disbursement of those funds and still owes $1.2 million on the $1.65 million loan.

After the default action reached the courts, questions arose regarding payments condo owners made to Geneva Hospitality to be forwarded to PNC Bank.

Many owners allege that the amount that they have paid collectively is not reflected in the balance due on the loan. The balance remaining is $1.2 million, despite apparently hundreds of thousands of dollars in payments.

At one point, during the hearing, the sheriff’s deputy in the courtroom admonished the gallery for repeated out-bursts of laughter or talking. He warned that he would remove individuals or clear the gallery if the situation continued. It ceased.

Webster will have until the close of business on Friday to turn over the requested documents or face jail time.


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