PAII CEO Resigns, PAII Board of Directors have been removed

[birdwatcher]

WOW been away for a while, that was some read. Jay is indeed a great person, who knows maybe he will start something better. I hope all doors open for him

 

[Woiyvonne]

...there have been changes in circles higher than my seat, and I had a vision for PAII that wasn't necessarily congruent with their vision...I wish my exit was under different circumstances
Maybe he was fired by the doily lobby. Or maybe TA bought PAII and fired the whole board and exec. director to shut up the whining us small-timers.
Quite a surprise. Jay is a great guy, bright and dedicated. He was probably a lot more popular with the membership than those in "circles higher than his seat."
But what do I know. I left when they more than tripled my membership fee. No regrets, but it would have been fun to read the PAII forum over the next week..

Those of you who do not have access to the PAII forum might be interested to read this post by a DIA investor and former PAII board member.
There are also several posts from other board members offering similar perspectives.
My partner, Frank Salvo and I own the 1889 WhiteGate Inn in Asheville, NC. Until January 2, I was a board member of both DIA and PAII. Frank and I invested in DIA almost 10 years ago and sold our shares, for a nominal amount, to PAII about 4 years ago when there was a move to take PAII non-profit. We were active stockholders, attending all meetings until we sold our shares. A year ago at the Las Vegas PAII conference, I was asked to serve on the DIA board to help get DIA active again after 3 years of dormancy, because a potential sale of PAII was being talked about.
More recently, I was asked to serve on the board of PAII and became Finance Committee chair. On January 2, I resigned from both boards. Since I feel well qualified to look at recent events from both sides of the fence, I would like to respond to Pete Holladay's e-mail to the PAII membership.
"PAII was purchased and encouraged to form their own Board of Directors and DIA would virtually keep "hands off". It is important to note that the investors have never received one dime from their investment, not even a cup of coffee!”
As stated, DIA was "hands off" and in fact, really borderline negligent during the past 13 years. There was no legal requirement for it to be active, but by doing so, it let a separate and distinct culture grow at PAII, a non-profit 501-c6 type of culture. Of course, PAII wanted to stand on its own because DIA NEVER stepped forward to help PAII during its darkest months and years. They let PAII members and Board members loan money to the association when the recession hit hardest.
"Within the past year it was determined that PAII was having financial difficulty and the Board of Managers of DIA found it necessary to step in and do their best to help PAII through these difficult times so that it could continue to serve the innkeeping industry.”
As Finance chair, I was privy to all records, and due to DIA demands all aspects of PAII’s financial history, budget, income, and expenses were looked at, all the way down to line item analysis. There was DIA board determination that monies must be hidden somewhere or certainly misspent. There was no "smoking gun" discovered, and no improprieties, just a few minor accounting errors that were easily resolved. DIA's board persisted, however, that the Innkeeping Foundation (IF) was set up to divert corporate assets or opportunities but the reality is that the IF was looking out for PAII's best interests, both financially and strategically.
Average gross income at PAII actually increased 2% from 2007-2012 while costs were controlled better than by Jay's predecessors of the previous 5 years (2002-2007). These are obviously not stellar results but they show marked improvement. It takes time to get out of a financial hole considering the compounding results of year after year of poor performance, and the impact of The Great Recession. Under Jay's leadership PAII's financial strength was heading in the right direction. In fact, my last act as Finance chair was the authorization of the payoff of PAII's last outstanding loan, to a former board member, in the amount of $24,000. Does this sound like a company in financial difficulty?
"Several years ago, PAII established BETTER WAY TO STAY and many innkeepers, vendors and friends contributed to this worthwhile endeavor. Subsequently, PAII, without any authorization, established a separate corporation and moved funds from PAII into this new corporation.”
DIA's board basically accused Jay and the PAII board of criminal activity by putting Better Way To Stay where the financial supporters both wanted it and assumed it was, into the Innkeeping Foundation, a non-profit. The IF was compensating the for-profit PAII for the work it was doing on the BWTS campaign. There was no requirement then or now, that dictated PAII had to seek permission from DIA to do this. They never once cited any statue or by-law and just kept stating "you didn't get our permission." And to really complicate matters, the DIA controlled PAII board cancelled the agreement with the IF, effective January 11, immediately before the conference. They now insist BWTS funds should stay with PAII, which is now in COMPLETE control by the investors.
"The PAII Board and DIA were as surprised as anyone and not prepared for this development.”
Really? Jay's resignation did not come as a surprise to me. And based on what he was put through the past 9 months I am only surprised it did not come sooner, but he is a fighter and his love for PAII kept him in the fight. Jay endured a great deal of accusation, questioning, and threats over the past 9 months in an environment void of trust and shared vision. He was working under a cloud of suspicion and inquisition, all of it unfounded. PAII board meetings were scheduled without consulting the PAII CEO and Chair. The new PAII board simply would not let Jay do his job. As of January 2, they have relieved him of all duties and will not even permit him come to the conference.
Oddly enough, Jay was fully prepared to stay at PAII had an offer to buy PAII been accepted by the DIA board and stockholders. It was a serious offer but it was rejected and I cannot discuss the details, except to say if it had gone through, PAII would be changed to a non-profit, the old board would probably be back, and we would not even be having this discussion.
The one consistent I have seen over the past 9 months, starting with mediation between DIA and PAII last April and continuing through January 2, is that everything revolves around the money. The remaining stockholders demand that they be compensated for 100% of their initial investment, in a company that based on a business appraisal done before mediation, has no monetary value. No amount of cajoling on my part over the past 9 months has changed their minds. Based on the financial performance of PAII over the past 13 years, how can they expect a 100% return on their investment? As brutal as it may sound, the remaining DIA stockholders have been crystal clear that it is all about the money. Nothing in their actions has demonstrated their concern for the industry.
I want to be crystal clear also when I state that DIA has not done anything they are not allowed to do. But they have sorely underestimated how much goodwill PAII relies on. The foundation of that good will was the board and Jay.
The PAII members are demanding answers and deserve answers to their questions. Please contact Pete Holladay as he requested at [email protected].
The jury is still out for Frank and I on how much time, energy, or money we will be willing to commit to the "new" PAII. We do look forward to the conference and catching up with old friends, taking advantage of the great workshops, and learning more about becoming the best innkeepers we can be. See you in Charleston.
Sincerely,
Ralph A. Coffey
1889 WhiteGate Inn & Cottage
173 East Chestnut Street
Asheville, NC 28801
[email protected]

 

[Arks]

What a GOOD LETTER! Very informative.
DIA may be DOA.

 

[EmptyNest]

What a GOOD LETTER! Very informative.
DIA may be DOA..

Yes I agree..quite informative. I have no reason not to believe him as I know them both and trust them more than I do someone else. That's all I will say.

 

[JBloggs]

Wow
thanks for sharing that with us from the Asheville Innkeepers.

 

[Copperhead]

...there have been changes in circles higher than my seat, and I had a vision for PAII that wasn't necessarily congruent with their vision...I wish my exit was under different circumstances
Maybe he was fired by the doily lobby. Or maybe TA bought PAII and fired the whole board and exec. director to shut up the whining us small-timers.
Quite a surprise. Jay is a great guy, bright and dedicated. He was probably a lot more popular with the membership than those in "circles higher than his seat."
But what do I know. I left when they more than tripled my membership fee. No regrets, but it would have been fun to read the PAII forum over the next week..

Those of you who do not have access to the PAII forum might be interested to read this post by a DIA investor and former PAII board member.
There are also several posts from other board members offering similar perspectives.
My partner, Frank Salvo and I own the 1889 WhiteGate Inn in Asheville, NC. Until January 2, I was a board member of both DIA and PAII. Frank and I invested in DIA almost 10 years ago and sold our shares, for a nominal amount, to PAII about 4 years ago when there was a move to take PAII non-profit. We were active stockholders, attending all meetings until we sold our shares. A year ago at the Las Vegas PAII conference, I was asked to serve on the DIA board to help get DIA active again after 3 years of dormancy, because a potential sale of PAII was being talked about.
More recently, I was asked to serve on the board of PAII and became Finance Committee chair. On January 2, I resigned from both boards. Since I feel well qualified to look at recent events from both sides of the fence, I would like to respond to Pete Holladay's e-mail to the PAII membership.
"PAII was purchased and encouraged to form their own Board of Directors and DIA would virtually keep "hands off". It is important to note that the investors have never received one dime from their investment, not even a cup of coffee!”
As stated, DIA was "hands off" and in fact, really borderline negligent during the past 13 years. There was no legal requirement for it to be active, but by doing so, it let a separate and distinct culture grow at PAII, a non-profit 501-c6 type of culture. Of course, PAII wanted to stand on its own because DIA NEVER stepped forward to help PAII during its darkest months and years. They let PAII members and Board members loan money to the association when the recession hit hardest.
"Within the past year it was determined that PAII was having financial difficulty and the Board of Managers of DIA found it necessary to step in and do their best to help PAII through these difficult times so that it could continue to serve the innkeeping industry.”
As Finance chair, I was privy to all records, and due to DIA demands all aspects of PAII’s financial history, budget, income, and expenses were looked at, all the way down to line item analysis. There was DIA board determination that monies must be hidden somewhere or certainly misspent. There was no "smoking gun" discovered, and no improprieties, just a few minor accounting errors that were easily resolved. DIA's board persisted, however, that the Innkeeping Foundation (IF) was set up to divert corporate assets or opportunities but the reality is that the IF was looking out for PAII's best interests, both financially and strategically.
Average gross income at PAII actually increased 2% from 2007-2012 while costs were controlled better than by Jay's predecessors of the previous 5 years (2002-2007). These are obviously not stellar results but they show marked improvement. It takes time to get out of a financial hole considering the compounding results of year after year of poor performance, and the impact of The Great Recession. Under Jay's leadership PAII's financial strength was heading in the right direction. In fact, my last act as Finance chair was the authorization of the payoff of PAII's last outstanding loan, to a former board member, in the amount of $24,000. Does this sound like a company in financial difficulty?
"Several years ago, PAII established BETTER WAY TO STAY and many innkeepers, vendors and friends contributed to this worthwhile endeavor. Subsequently, PAII, without any authorization, established a separate corporation and moved funds from PAII into this new corporation.”
DIA's board basically accused Jay and the PAII board of criminal activity by putting Better Way To Stay where the financial supporters both wanted it and assumed it was, into the Innkeeping Foundation, a non-profit. The IF was compensating the for-profit PAII for the work it was doing on the BWTS campaign. There was no requirement then or now, that dictated PAII had to seek permission from DIA to do this. They never once cited any statue or by-law and just kept stating "you didn't get our permission." And to really complicate matters, the DIA controlled PAII board cancelled the agreement with the IF, effective January 11, immediately before the conference. They now insist BWTS funds should stay with PAII, which is now in COMPLETE control by the investors.
"The PAII Board and DIA were as surprised as anyone and not prepared for this development.”
Really? Jay's resignation did not come as a surprise to me. And based on what he was put through the past 9 months I am only surprised it did not come sooner, but he is a fighter and his love for PAII kept him in the fight. Jay endured a great deal of accusation, questioning, and threats over the past 9 months in an environment void of trust and shared vision. He was working under a cloud of suspicion and inquisition, all of it unfounded. PAII board meetings were scheduled without consulting the PAII CEO and Chair. The new PAII board simply would not let Jay do his job. As of January 2, they have relieved him of all duties and will not even permit him come to the conference.
Oddly enough, Jay was fully prepared to stay at PAII had an offer to buy PAII been accepted by the DIA board and stockholders. It was a serious offer but it was rejected and I cannot discuss the details, except to say if it had gone through, PAII would be changed to a non-profit, the old board would probably be back, and we would not even be having this discussion.
The one consistent I have seen over the past 9 months, starting with mediation between DIA and PAII last April and continuing through January 2, is that everything revolves around the money. The remaining stockholders demand that they be compensated for 100% of their initial investment, in a company that based on a business appraisal done before mediation, has no monetary value. No amount of cajoling on my part over the past 9 months has changed their minds. Based on the financial performance of PAII over the past 13 years, how can they expect a 100% return on their investment? As brutal as it may sound, the remaining DIA stockholders have been crystal clear that it is all about the money. Nothing in their actions has demonstrated their concern for the industry.
I want to be crystal clear also when I state that DIA has not done anything they are not allowed to do. But they have sorely underestimated how much goodwill PAII relies on. The foundation of that good will was the board and Jay.
The PAII members are demanding answers and deserve answers to their questions. Please contact Pete Holladay as he requested at [email protected].
The jury is still out for Frank and I on how much time, energy, or money we will be willing to commit to the "new" PAII. We do look forward to the conference and catching up with old friends, taking advantage of the great workshops, and learning more about becoming the best innkeepers we can be. See you in Charleston.
Sincerely,
Ralph A. Coffey
1889 WhiteGate Inn & Cottage
173 East Chestnut Street
Asheville, NC 28801
[email protected]
.

Thank you Ralph for more insite to this mess.

 

[Madeleine]

...there have been changes in circles higher than my seat, and I had a vision for PAII that wasn't necessarily congruent with their vision...I wish my exit was under different circumstances
Maybe he was fired by the doily lobby. Or maybe TA bought PAII and fired the whole board and exec. director to shut up the whining us small-timers.
Quite a surprise. Jay is a great guy, bright and dedicated. He was probably a lot more popular with the membership than those in "circles higher than his seat."
But what do I know. I left when they more than tripled my membership fee. No regrets, but it would have been fun to read the PAII forum over the next week..

Those of you who do not have access to the PAII forum might be interested to read this post by a DIA investor and former PAII board member.
There are also several posts from other board members offering similar perspectives.
My partner, Frank Salvo and I own the 1889 WhiteGate Inn in Asheville, NC. Until January 2, I was a board member of both DIA and PAII. Frank and I invested in DIA almost 10 years ago and sold our shares, for a nominal amount, to PAII about 4 years ago when there was a move to take PAII non-profit. We were active stockholders, attending all meetings until we sold our shares. A year ago at the Las Vegas PAII conference, I was asked to serve on the DIA board to help get DIA active again after 3 years of dormancy, because a potential sale of PAII was being talked about.
More recently, I was asked to serve on the board of PAII and became Finance Committee chair. On January 2, I resigned from both boards. Since I feel well qualified to look at recent events from both sides of the fence, I would like to respond to Pete Holladay's e-mail to the PAII membership.
"PAII was purchased and encouraged to form their own Board of Directors and DIA would virtually keep "hands off". It is important to note that the investors have never received one dime from their investment, not even a cup of coffee!”
As stated, DIA was "hands off" and in fact, really borderline negligent during the past 13 years. There was no legal requirement for it to be active, but by doing so, it let a separate and distinct culture grow at PAII, a non-profit 501-c6 type of culture. Of course, PAII wanted to stand on its own because DIA NEVER stepped forward to help PAII during its darkest months and years. They let PAII members and Board members loan money to the association when the recession hit hardest.
"Within the past year it was determined that PAII was having financial difficulty and the Board of Managers of DIA found it necessary to step in and do their best to help PAII through these difficult times so that it could continue to serve the innkeeping industry.”
As Finance chair, I was privy to all records, and due to DIA demands all aspects of PAII’s financial history, budget, income, and expenses were looked at, all the way down to line item analysis. There was DIA board determination that monies must be hidden somewhere or certainly misspent. There was no "smoking gun" discovered, and no improprieties, just a few minor accounting errors that were easily resolved. DIA's board persisted, however, that the Innkeeping Foundation (IF) was set up to divert corporate assets or opportunities but the reality is that the IF was looking out for PAII's best interests, both financially and strategically.
Average gross income at PAII actually increased 2% from 2007-2012 while costs were controlled better than by Jay's predecessors of the previous 5 years (2002-2007). These are obviously not stellar results but they show marked improvement. It takes time to get out of a financial hole considering the compounding results of year after year of poor performance, and the impact of The Great Recession. Under Jay's leadership PAII's financial strength was heading in the right direction. In fact, my last act as Finance chair was the authorization of the payoff of PAII's last outstanding loan, to a former board member, in the amount of $24,000. Does this sound like a company in financial difficulty?
"Several years ago, PAII established BETTER WAY TO STAY and many innkeepers, vendors and friends contributed to this worthwhile endeavor. Subsequently, PAII, without any authorization, established a separate corporation and moved funds from PAII into this new corporation.”
DIA's board basically accused Jay and the PAII board of criminal activity by putting Better Way To Stay where the financial supporters both wanted it and assumed it was, into the Innkeeping Foundation, a non-profit. The IF was compensating the for-profit PAII for the work it was doing on the BWTS campaign. There was no requirement then or now, that dictated PAII had to seek permission from DIA to do this. They never once cited any statue or by-law and just kept stating "you didn't get our permission." And to really complicate matters, the DIA controlled PAII board cancelled the agreement with the IF, effective January 11, immediately before the conference. They now insist BWTS funds should stay with PAII, which is now in COMPLETE control by the investors.
"The PAII Board and DIA were as surprised as anyone and not prepared for this development.”
Really? Jay's resignation did not come as a surprise to me. And based on what he was put through the past 9 months I am only surprised it did not come sooner, but he is a fighter and his love for PAII kept him in the fight. Jay endured a great deal of accusation, questioning, and threats over the past 9 months in an environment void of trust and shared vision. He was working under a cloud of suspicion and inquisition, all of it unfounded. PAII board meetings were scheduled without consulting the PAII CEO and Chair. The new PAII board simply would not let Jay do his job. As of January 2, they have relieved him of all duties and will not even permit him come to the conference.
Oddly enough, Jay was fully prepared to stay at PAII had an offer to buy PAII been accepted by the DIA board and stockholders. It was a serious offer but it was rejected and I cannot discuss the details, except to say if it had gone through, PAII would be changed to a non-profit, the old board would probably be back, and we would not even be having this discussion.
The one consistent I have seen over the past 9 months, starting with mediation between DIA and PAII last April and continuing through January 2, is that everything revolves around the money. The remaining stockholders demand that they be compensated for 100% of their initial investment, in a company that based on a business appraisal done before mediation, has no monetary value. No amount of cajoling on my part over the past 9 months has changed their minds. Based on the financial performance of PAII over the past 13 years, how can they expect a 100% return on their investment? As brutal as it may sound, the remaining DIA stockholders have been crystal clear that it is all about the money. Nothing in their actions has demonstrated their concern for the industry.
I want to be crystal clear also when I state that DIA has not done anything they are not allowed to do. But they have sorely underestimated how much goodwill PAII relies on. The foundation of that good will was the board and Jay.
The PAII members are demanding answers and deserve answers to their questions. Please contact Pete Holladay as he requested at [email protected].
The jury is still out for Frank and I on how much time, energy, or money we will be willing to commit to the "new" PAII. We do look forward to the conference and catching up with old friends, taking advantage of the great workshops, and learning more about becoming the best innkeepers we can be. See you in Charleston.
Sincerely,
Ralph A. Coffey
1889 WhiteGate Inn & Cottage
173 East Chestnut Street
Asheville, NC 28801
[email protected]
.

Thank you for posting that Yvonne.