Downtown Business Association fires back at merchant group lawyer

The London Downtown Business Association (LDBA) is denying allegations of mismanagement of funds and demanding the lawyer representing disgruntled downtown merchants recuse himself due to conflict of interest claims.

On Thursday, the downtown association's legal counsel released a public letter directed to lawyer Michael Lerner, who represents a number of core businesses who have expressed "disappointment and frustration" in the LDBA.

The letter was in response to a series of requests made by Lerner who questioned the LDBA's spending habits, pay structure and operating bylaws.

In the letter, lawyer Susan Toth addressed those requests as well as changes to the proposed ad hoc committee, which was struck up after mass merchant discontent with the LDBA.

It contained confidential letters from Lerner that were made public by the association Thursday "in the interest of transparency to [LDBA] members."

"What we want to accomplish from this letter apart from clarifying the record was to really make sure the members and the public knew that we just really want to keep moving forward and do good work. We wanted to make it clear that this is impacting morale of staff who have done nothing but dedicate so much time and energy to the improvement of the downtown," Toth told CBC News.

Michael Lerner told CBC News on Thursday he would not provide comment until he has met with his clients.

Allegations 'simply untrue'

In a request to the association back in December, Lerner said "there is a belief that the funds with which they are entrusted are not being properly managed for the benefit of the membership."

Toth said those are "extremely serious allegations." She said the LDBA is audited by a city body and there has "never been any suggestion or concern by this professional group of any mismanagement of funds. It is simply untrue."

She said the allegations reflected in Lerner's letter are potentially defamatory.

Lerner had also requested a look into the LDBA general manager contract and his clients had called for a breakdown of staff salaries.

When asked about the initial accusation, general manager Janette MacDonald told CBC she was "upset and disappointed."

"I was angry and I really didn't think any of the accusations were founded. I've been around a long time. My staff and I do the best job that we can along with our board and I was extremely hurt and offended," she told CBC.

"We just want to move on … We all just want to work together," she added.

Toth said the contract is "a private personnel matter and will not be provided to the public or the membership" and "individual salaries are private personnel information."

Conflict of interest

The LDBA also took the opportunity to highlight its own concerns in relation to Lerner.

Toth revealed that more than three years ago, Lerner represented the LDBA in an agreement involving Fanshawe College. She said there is a conflict of interest that "centres around that duty of loyalty that lawyers have to both current and former clients."

"So the big concern here is what is it like if you're a client, you hire somebody, they work for you, it's a successful outcome and just a couple of years later, they're working against you. What message does that send about the legal profession?" she said.

The LDBA suggested Lerner remove himself from the file and that his clients find new legal counsel.

The LDBA has also asked Lerner for a full list of the members he represents.

Ad hoc committee

Members of the association shared concern at a tense annual general meeting this month when they voted not to receive a proposed 2019 budget and demanded the board provide a detailed breakdown of the numbers. They also approved a slate of directors on an interim basis.

They supported the creation of an ad hoc committee that would review the association's nomination and voting practices, including its bylaws.

Three board members and three of Lerner's clients were initially meant to sit on the committee.

However, Toth said the committee should also include people who aren't represented by Lerner as well as non-levy paying members.

"We are open, we want to listen. We are trying to determine where the issues are and we are working on them. We want to move forward," Toth said.

Member reacts

Though the board was trying to achieve transparency by making all correspondence with Lerner public, not every business owner was happy with that move.

Sandy Weir, owner of Smooth Wax Bar, said she was disappointed by the communication method.

"Whenever there's conflict, it's important people get together and have the dialogue and discuss issues. If we're going to get into a forum where each side is going to send out public statements I think it's going to be really hard to find the resolution that members deserve," she told CBC.

There will be a board meeting open to members late February.