Crossville Chronicle, Crossville, TN

Area News

January 18, 2011

Lake Tansi POA members sue association

CROSSVILLE — Members of the Lake Tansi Property Owners Association have filed suit in Cumberland County Chancery Court asking for the dissolution of the POA corporation.

The suit, filed by almost 100 POA members, alleges the board of directors have acted in a manner that is illegal, oppressive or fraudulent and that corporate assets are being misapplied or wasted.

The specific allegations state Claude C. "Duke" Coyne, former general manager of the Tansi Sewer Utility District, was a member of the Tansi POA board of directors and president of Tansi Waste Management, Inc. (TMWI), had a conflict of interest.

"At the same time and at all times relevant to this lawsuit, Claude C. 'Duke' Coyne was President — CEO of Tansi Waste Management, Inc., a Tennessee nonprofit corporation, which was originally established on Dec. 10, 2008 to provide sewer service to the facilities owned by a single customer, Lake Tansi Village Property Owners Association, Inc., of which Claude C. 'Duke' Coyne was a director.

"Upon information and belief, Tansi Waste Management, Inc. was established as a wholly owned subsidiary of Lake Tansi Village Property Owners Association, Inc."

On Dec. 9, 2008, the POA board of directors transferred several assets of the corporation to TWMI, including its state of Tennessee permit for the bio-membrane wastewater treatment facility, rights to utility engineering service arising from a contract between the POA and Environmental & Engineering Services and a 99-year lease of 1/2 acre of land at $1 a year.

Coyne was a member of the POA board of directors at that time and, according to the lawsuit, the presumptive president of TMWI. He endorsed the transfers. The suit further claims the transfer of POA assets should have been approved by a 2/3 majority vote of the POA membership.

TWMI was granted authority on Feb. 27, 2009, to provide sewer services to other customers near and in the Lake Tansi development who were not members of the POA, the suit states. That request was granted by former Cumberland County Mayor Brock Hill, the suit states.

The POA board later transferred other assets to TWMI, approving $125,000 in cash approved June 17, 2009.

Coyne was both president of TWMI and a member of the POA board at the time the resolution was approved. The suit further states the transfer of the funds and securing the loan should have been approved by a 2/3 majority of the POA membership.

The suit alleges TWMI was a wholly owned subsidiary of the POA. It points to the $1.2 million line of credit the POA secured, using its real property, through First National Bank of Tennessee to make funds available to TWMI to finance construction of a sewer treatment plant and collection system to serve POA amenities.

The suit states the TWMI board's resolution of intent to transfer all its assets to Tansi Sewer Utility District, approved Sept. 1, 2009, was illegal as it was not approved by a 2/3 vote of the membership of the POA.

David Sutton, POA general manager, said, the POA was still working with the attorney and he had no comments on the suit at this time.

The suit seeks the dissolution of the POA, with one or more court-appointed receivers to liquidate the assets of the corporation or one or more court-appointed custodians to manage the affairs of the corporation. It also seeks payment of attorney fees and court costs.

The suit was filed Jan. 11.

Many of those members participating in the lawsuit are part of the Stop the Tansi Sewer group that has been fighting the sewer project. The group is planning a press conference and rally Jan. 22 at noon at the Music Barn on Dunbar Road.

The Lake Tansi POA board will hold its quarterly business meeting Jan. 27 at 6 p.m at the Thunderbird Activity Center.


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