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O.C. Arts Official Bows Out

Suit: Incoming head of Performing Arts Center won't be chairman but will stay on board.

April 05, 2002|ANN CONWAY and JEFF GOTTLIEB | TIMES STAFF WRITERS

The incoming chairman of the Orange County Performing Arts Center, whose stock fraud lawsuit against two of the center's largest donors led to their resignations from the board, said Thursday he will not take the center's top job.

Thomas Tierney, scheduled to become chairman in July, will remain on the 51-member board, said Roger Kirwan, the center's current chairman.

Kirwan said he did not expect the defendants in the lawsuit, Henry Samueli and Henry T. Nicholas III, founders and top executives of Broadcom, to rejoin the board. Neither of them could be reached for comment.

Kirwan said Tierney told him of his decision Thursday morning. He made his official announcement at the board's regular meeting later in the day.

"He said he was very reluctantly doing it because he felt it was causing problems for the center, and he had spent 16 years working on behalf of the center and had no desire to cause problems for the center and would step aside rather than see that happen,'' Kirwan said.

The board reacted first with surprised silence. Then board members stood and applauded, Kirwan said. "There was great sadness on everyone's faces, including tears on many members' faces,'' he said.

Tierney, who is head of the fitness and nutrition company BodyWise International Inc., could not be reached for comment Thursday.

In a news release, he said, "Obviously, it was never my, nor anyone's, intent to cause a problem for the Center. I hope that by my stepping aside, we can properly direct our energies to fulfilling the Center's mission and move forward with our expansion."

Three board members in addition to Tierney are among the 26 plaintiffs in the Broadcom lawsuit.

The suit, which the Broadcom executives dismissed as frivolous, contends that Broadcom inflated sales and earnings by improperly accounting for certain expenses.

This boosted Broadcom's stock price, which allowed Nicholas, Samueli and William J. Reuhle, chief financial officer, to sell at least $80 million in stock options before the company's shares dropped drastically last fall, according to the suit.

Kirwan said the executive committee will recommend its choice for chairman at its meeting in two weeks. The full board will vote on the candidate at its next meeting, in May. That person would take over in July.

The lawsuit and the board resignations created tensions among Orange County arts leaders and charity benefactors since its filing was reported in The Times last month.

"People are taking sides on this issue," Zelma Allred, a member of the performing arts center's executive committee, said last week.

The situation has led to strained social encounters at charitable events. At a UC Irvine awards ceremony two weeks ago, Samueli and his wife, Susan, found themselves in the same ballroom as Tierney and his wife, Elizabeth.

"Conversation has become awkward at arts gatherings," said Martin Hubbard, executive director of Opera Pacific. "It has changed the dynamics of what's being talked about and how it's being talked about."

The controversy comes at a delicate time for the performing arts center, which is in the midst of a $200-million campaign to build a 2,000-seat concert hall and a 500-seat theater next to the 3,000-capacity Segerstrom Hall.

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