A bitter legal fight between the two owners of Jackass Flats has forced the Dayton bar into receivership, and the bar’s operator told Dayton Police Monday that he believes the theft of a tractor from the Jackass Flats property the previous night may be related to the legal dispute.
The bar and restaurant at 6024 Rip Rap Road is still operating with normal business hours, including lunch service, under a court-appointed receiver while both sides await the outcome of the lawsuit and of an appeal pending in the Ohio Second District Court of Appeals. But a negotiated settlement of the legal issues also is possible, attorneys for both sides said Wednesday. The bar is a popular spot especially on “bike nights,” when hundreds of motorcycle owners and enthusiasts flock to the large outdoor area surrounding the bar.
The dispute spilled over in the courts 13 months ago when John T. Walsh of Kettering — described in court documents as an original investor and 50 percent owner of Jackass Flats LLC — sued his business partner Terry L. Smith of Huber Heights, who owned 50 percent of the business and managed the bar. The lawsuit, filed in Montgomery County Common Pleas Court, claimed that Smith took unauthorized compensation from the company and failed to file tax returns in 2011, among other allegations.
In the lawsuit, Walsh sought compensatory damages of more than $500,000, punitive damages of $100,000 and a court order dissolving the company and dividing its assets.
Two months later, Smith filed a counterclaim against Walsh, denying the allegations and claiming that Walsh had “failed to contribute to the management and operation of Jackass Flats” and had taken $47,000 from the business that Walsh “wrongfully claimed to be profit.”
In her Aug. 27 decision to remove, at least temporarily, the bar’s ownership and appoint a receiver to operate Jackass Flats until the conflict is resolved or the company is dissolved, Montgomery County Common Pleas Judge Mary K. Huffman wrote that Smith’s testimony in the case was “lacking in credibility” and led the judge to believe that Smith “practiced rather lax methods of accounting and management.”
Smith has challenged Judge Huffman’s decision to appoint a receiver to operate Jackass Flats in the court of appeals, but his attempt to block the appointment until the appeals court rules failed.
Attorneys for both men say there are mediation efforts underway that could result in a settlement that would resolve the dispute and ownership issues.
“It’s a very popular venue and a great business, and it’s unfortunate that it has come to this, but we have to work through it,” Gary J. Leppla, Smith’s attorney, said Wednesday.
Walsh’s attorney, Ralph A. Skilken Jr., confirmed mediation talks are ongoing that may result in Smith buying out Walsh’s share of the business and the lawsuits being dismissed. “We’re keeping our fingers crossed,” Skilken said.
On Monday, James Roberts, who is operating the bar while it is under court supervision, notified Dayton Police that a 1974 Ford tractor with a three-point hitch, valued at $5,500, had been stolen from the property during the overnight hours Sunday, according to Dayton police reports.
Roberts told a Dayton police officer he believed Smith may have taken the tractor, according to the Dayton police incident report.
Leppla, Smith’s attorney, said of the accusation, “That’s ridiculous.”
Dayton police supervisors could not be reached Wednesday. A hearing in the civil case is scheduled for Dec. 13 in Judge Huffman’s courtroom.