Long Beach Press-Telegram
 

Tuesday, March 7, 2000

2 L.B. jewels war in court

 

By Wendy Thomas,
Staff writer

LONG BEACH Two Long Beach cultural attractions the Queen Mary and the Museum of Latin American Art are locked in a legal struggle over $1 million.

At the center of the controversy is millionaire philanthropist Robert Gumbiner, a Long Beach doctor who founded MoLAA and helped found RMS Foundation, which operates the Queen Mary. Gumbiner, who loaned RMS $2 million in February 1993, then later forgave half the debt, has since donated the $1-million promissory note to MoLAA, said MoLAA's attorney, Clifford W. Roberts Jr.

In a 1999 lawsuit filed by MoLAA, RMS chairman Joseph Prevratil is accused of breaching the contract by not paying back the loan or the 10 percent interest, which allegedly began accruing annually in October 1994.

The two parties are due in court for a status conference next week a year after the struggle began but attorneys for both sides said Monday they had not yet resolved the case.

RMS attorney Lawrence Nagler declined further comment, saying only: "We're quite comfortable with our position in the case." And Prevratil, too, said RMS had "a very good case" but declined to elaborate because the case is pending.

Prevratil and Gumbiner started out as partners with a common interest: to keep the ailing Queen Mary in Long Beach. But the men had two major falling outs over the years. One involved the management of RMS, which Gumbiner left in October 1993. The other involved Gumbiner's 1995 ouster as chairman of FHP International Corp., a company he founded in 1962. Prevratil was one of the directors who voted for his ouster.

Complicating the lawsuit is the alleged existence of an agreement between Gumbiner and Prevratil. According to the lawsuit, Gumbiner on several occasions until Dec. 29, 1994, said he'd forgive the remaining $1 million loan if certain conditions were met.

The conditions, the suit states, include confirmation that funds were used for charitable purposes, submission of annual financial plans, notification of proposed deviations from the original concept of RMS, confirmation that Prevratil would work full-time on RMS' business affairs and a right to audit RMS.

"It was a loan with a possibility that, with the fulfillment of conditions, it could have become a gift," Roberts said.

But the specifics of this agreement or of RMS' failure to meet the alleged conditions haven't yet been provided to the court, and Roberts declined comment on that portion of the case.