Secret Cedar Fair documents released

Formerly secret court documents show that just days before his job ended, Cedar Fair's Jacob "Jack" Falfas was still being carefully groomed to replace Dick Kinzel as the company's new chief exeutive officer.The documents show Falfas was fired or quit during a brief but tense phone call.The topic of the June 10 conversation — between Kinzel and Falfas — was Cedar Point's expensive and ill-fated "Rock Band Live" show.Falfas was earning more than $1 million a year in salary and bonuses before suddenly losing his job.A three-member arbitration panel ruled 2-1 earlier this year that Falfas had been fired without cause. The panel ordered Cedar Fair to reinstate Falfas as chief operating officer and give him back pay.The fate of Falfas' job is in litigation in Erie County Common Pleas Court.Cedar Fair concedes it lost the arbitration and owes Falfas money, but it also says arbitrators exceeded their authority by telling Cedar Fair to give him his job back.Court magistrate Steve Bechtel said briefs from the two sides will be submitted to the court in late June.Cedar Fair axed "Rock Band Live" after only one season.It will be replaced this year with "Rockin' the Point," featuring hits from the 1970s and 1980s.Kinzel is scheduled to retire in January, and the company is expected to announce a new CEO soon.The court documents, only recently unsealed, show that on June 2, 2010 -- just days before Falfas' departure -- Kinzel sent a memo to Cedar Fair's board explaining he had reorganized the company's management team to shore up the plan to make Falfas the new CEO.Falfas is weak on financial skills but strong in operations, Kinzel explained.Promoting Peter Crage to executive vice president and David Hoffman to vice president of finance and corporate tax would allow Falfas to concentrate on operations, the memo said.But the relationship between Kinzel and Falfas soured days later.Kinzel was unhappy about the Rock Band show's $1.6 million price tag, particularly the $275,000 licensing fee Cedar Fair paid MTV.The two men discussed the matter in a phone call and email.It came to a head at 5:19 p.m. June 10 -- a Thursday -- when Falfas flew into Cleveland Hopkins International Airport. He used his cell phone to return a call from Kinzel, Falfas testified during the January arbitration hearing.Terse and tenseThe discussion lasted 1 minute and 34 seconds.Court documents show Falfas complained to Kinzel about "the way you're coming after me about 'Rock Band.'"Kinzel invited him to come in and talk about it and told Falfas he was being "stupid."Falfas said there was nothing else to talk about.Falfas said Kinzel replied, "Well, if that's the way you feel about it, leave."Falfas said when he offered to clean out his desk Saturday, Kinzel said, "Well, then go."Kinzel then hung up, Falfas said.Kinzel testified about the same brief phone call, but his account differed on key details."Jack called me and said he was in Cleveland and he said he would be in Sandusky to clean out his desk," Kinzel's said during his testimony. "And I said, 'Jack, don't be silly. Come in tomorrow, and we'll talk about this.' And he hung up."Two days later, Falfas showed up at Cedar Point and cleaned out his desk. He left behind his keys and other Cedar Fair property.The arbitration transcript shows both sides called witnesses.Barbara Falfas said she came home from a book club meeting at about 8:45 p.m. June 10 and was surprised to find her husband home."I can't believe that he let me go," Falfas told her. "He told me to leave.""I was astonished," Barbara testified. "I was beside myself, actually."Crage, the chief financial officer, testified he was still in his office on the evening of June 10.Kinzel, who usually knocked before entering, walked in and said, "Pete, guess what? Jack resigned."Kinzel seemed "surprised and stunned," Crage said.While the fateful phone conversation was June 10, Cedar Point filed a document with the U.S. Securities and Exchange Commission on June 17, saying Falfas quit June 12."On June 12, 2010, Jacob T. Falfas, Chief Operating Officer, resigned from Cedar Fair Entertainment Company effective immediately," the filing said. "All compensation and benefits pursuant to Mr. Falfas' employment agreement ceased on the last day of his employment."Falfas immediately disputed the filing and said he was fired.His contract allowed him to seek arbitration on the issue.Cedar Fair attorney Duffield Milkie wrote in a June 13 email: "This looks good. Jack actually resigned on June 12 by turning in his keys, etc. I think we use that date throughout and not get into any earlier notification. Jack never gave any definite notice. I think we should send to Dick for his approval, and we can let him know we need Jack's sign off."Testimony also shows Falfas opposed the decision to sell Cedar Fair to Apollo Global Management, a private equity firm. The deal collapsed after investors revolted.During the arbitration hearing, Kinzel said he never sought to get rid of Falfas."I mean, I've used the words that if I need it from Jack, it was on the other side of that wall, he would go through that wall to get it for me," Kinzel said. "That's how much confidence I had in Jack."Kinzel said Falfas tried to quit once before after the two had a disagreement."And I said, 'Jack, don't be silly.' And we just kept continuing working and that was the last, the last I ever heard of it," Kinzel said.