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Mon. Jul 22nd, 2024

The fight over finances explodes in the public eye

By meerna Jul11,2024
The fight over finances explodes in the public eye

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The financial battle over the Swan Ball that put the future of the evening gala in doubt has come to light.

In a lawsuit filed Monday, the newly formed nonprofit alleges that Cheekwood Estate & Gardens, the ball’s organizer and beneficiary, tried to seize control of the event from its original organizers.

But in a letter obtained by The Tennessean, Cheekwood’s lawyers explain that Cheekwood is working to bring the gala’s fundraising into line with national standards. The letter shows that over the past three years, just 32% of the Swan Ball’s revenue has gone to Cheekwood, far below what they say is the industry standard for high-profile charitable events of 60% to 70%.

“The Swan Ball in its current form is not sustainable,” reads the letter, written by attorney Maia T. Woodhouse of Adams and Reese. “The extravagant spending that has resulted in such low fundraising efficiency rates is at odds with Cheekwood’s charitable goals and guiding values, and is likely to be a shock to Cheekwood’s donors.”

A statement from Woodhouse on behalf of Cheekwood said the “dispute concerns Cheekwood’s commitment to fiscal responsibility and its donors.”

Chanelle Acheson, an attorney for the Swan Ball group that sued Cheekwood, disagreed with the analysis of the data presented in the letter.

“In Cheekwood’s analysis, these figures do not take into account the fact that nearly $600,000 of Swan Ball’s (2023) expenditures were to build infrastructure on the difficult terrain behind Cheekwood’s residence and pay two Swan Ball committee office staff. This represents almost 30% of the total (2023) budget,” Acheson said. “Most peer-run fundraising events either host their event at the recipient’s residence or donate the location to charity. … Cheekwood, as the recipient, did not provide that level of support … for this fundraising event.”

The lawsuit was filed in the U.S. District Court for the Middle District of Tennessee by a nonprofit called SB Initiative, which identifies itself as the successor to the Swan Ball Committee, whose volunteers have “created, organized, and oversaw the production” of Swan Ball since its first edition in 1963.

The ball raises money to support and preserve the 1930s Cheekwood Estate & Gardens. The annual ball is a prestigious social event attended by distinguished guests in stunning gowns and formal wear, and famous musical guests. The 2024 Swan Ball took place on June 1.

There was a dispute behind the scenes.

The lawsuit says Cheekwood first offered to take over the event’s accounting and finances ahead of the 2024 event.

“Unaware that the defendant was planning a coup d’état to seize control of the SWAN BALL gala, the plaintiff accepted the defendant’s offer,” the lawsuit reads.

The lawsuit alleges that Cheekwood “nefariously and covertly assumed complete control of the accounting and bookkeeping services” before taking control of other aspects of the event.

Woodhouse’s letter from Cheekwood paints a different picture. According to the letter, “the Swan Ball committee referred to in (the previous letter) is a department of Cheekwood from a legal, operational and financial standpoint, is subordinate to Cheekwood’s management and relies on Cheekwood’s assets (including the Cheekwood premises and the Swan Ball office) for its operations.”

Jana Davis, an SB Initiative member who chaired the 2019 Swan Ball, said, “Cheekwood can claim it’s their business, but they never had anything to do with” planning the event, adding that the group never thought it would have to form a nonprofit to legally separate itself from Cheekwood.

“This is Nashville. There’s a lot of trust and a lot of faith in the goodness of people, so nobody in 60 years thought there was a need to formalize what we considered a legal entity,” Davis said.

According to an emailed statement from Woodhouse on Cheekwood’s behalf, Cheekwood said it has been actively working with Swan Ball volunteers for nearly two years to “implement procedures to reduce expenses over time and increase the share of Swan Ball donor funds that go to Cheekwood to a modest 50 percent.”

“While Cheekwood believed they were working together, some Swan Ball volunteers were forming SB Initiative, Inc. in an attempt to separate Swan Ball from Cheekwood. Just last week, Cheekwood invited those behind SB Initiative to an open dialogue. Unfortunately, instead of accepting that invitation and engaging in good faith, those behind SB Initiative chose to pursue legal action,” Woodhouse’s statement read.

In a written statement, Cheekwood’s board said it “will vigorously defend its ownership of the Swan Ball and ensure it meets nationally recognized standards and best practices for philanthropic fundraising and expense metrics.” In the meantime, it said it would not schedule the event next year because of the lawsuit.

“Cheekwood has no choice but to postpone and cease all plans for Swan Ball 2025 until this matter is resolved,” the statement read.

Davis said the prom will take place in 2025, whether it is held at Cheekwood or elsewhere.

Adding to the confusion is the fact that both Cheekwood and SB Initiative have filed trademark applications for “SWAN BALL.” Cheekwood has owned the Tennessee trademark for Swan Ball for decades. The lawsuit, among other things, seeks to establish that SB Initiative owns the trademark.

Evan Mealins is a justice reporter for The Tennessean. Contact him at [email protected] or follow him on X, formerly known as Twitter, @EvanMeANDlin.

By meerna

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