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Cops and Courts

Oberlin College witness testifies that Gibson's Bakery's losses are 'grossly inflated'

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ELYRIA — An accountant who testified on behalf of Oberlin’s Gibson’s Bakery “grossly inflated” the financial hardship the business will face in the future due to its damaged reputation at Oberlin College, a financial expert for the college testified Thursday.

Sean Saari, a certified public accountant and certified valuation analyst with the business advisory firm Skoda Minotti, testified for most of the day in Lorain County Common Pleas Court on behalf of Oberlin College, one of two defendants in a multimillion-dollar lawsuit brought by the Gibson family, owners of the bakery on West College Street.

Gibson’s sued the college in 2017, a year after student protests took place outside the business over accusations of racism and racial profiling against African-American students at the college.

Under questioning by Matt Nakon, an attorney for Oberlin College, Saari dismissed the courtroom testimony of Frank Monaco, a CPA with 415 Group in Canton, that the actions of the college and its employees will cost the small family business millions of dollars in lost revenue over the next three decades.

Monaco testified May 20 that the bakery stands to lose $5.8 million over the next 30 years. Saari disagreed, saying the business itself is not worth nearly that much money and that its net equity value — the fair market value of a business’s assets minus its liabilities — has shrunk by an average of more than $3,000 a year since 2010.

Saari testified that his evaluation of Gibson’s business and tax records, rental agreements, tenant rolls and other financial documents showed that the bakery was worth only $35,000 on Dec. 31, 2015 — 11 months prior to the protests Gibson’s said damaged its business and reputation and led it to sue its largest customer, Oberlin College.

Monaco’s estimate of damages is “overstated” and “erroneous,” based on improper accounting and inflated numbers and the alleged financial damages to Gibson’s are “grossly inflated,” Saari testified.

The lawsuit came a year after an Oberlin College student tried to buy alcohol from Gibson’s using a fake ID and also tried to shoplift two bottles of wine in November 2016. Allyn D. Gibson, son of bakery owner David Gibson, followed the student out of the store and got into a physical altercation with him.

Two other students got involved. Oberlin police officers found Allyn D. Gibson, who is white, on the ground being assaulted by the students, who are black.

For two days after the incident, numerous Oberlin College students protested outside the bakery that has been on West College Street for more than 100 years, handing out flyers urging a boycott of the bakery and accusing its owners of racial profiling.

The students involved in the assault and shoplifting pleaded guilty in August 2017 to misdemeanor charges in Lorain County Common Pleas Court, acknowledged on the record that Allyn D. Gibson was within his right to detain the shoplifter and also admitted the incident was not racially motivated.

When a company suffers “permanent damage” to its business, Saari testified, it can’t recover and get back to the way things were before the damage occurred but it also can’t claim it lost more money than it was worth. Gibson’s, he testified, made about $990,000 in revenue in 2010, but had revenue of only $828,000 by the end of 2016, when the protests occurred.

That meant 10 percent of the business’s total revenue “had gone away” between 2010 and 2016, most of it prior to the protests, Saari testified.

Saari testified that Monaco also misstated lost revenue from residential and commercial rental properties owned by the Gibson family, who have claimed that renters no longer wanted to be associated with them after the protests.

According to Saari, Monaco inflated the rent the Gibsons charged at their rental properties and included in their list of vacant apartments abandoned after the protests one that Allyn W. Gibson lived in until he suffered a fall at home while answering what his family said was a knock at his door by protestors planning to harass him.

Monaco testified some of the vacancies were post-protest, but Saari dismissed his counterpart’s estimate that the Gibson family lost any money over the community’s or students’ unwillingness to rent property from them or park in the family’s pay parking lot in the city.

There is no evidence that anyone has refused to live in the Gibson family rental properties at 189 or 549 W. College St. due to allegations they were racially profiling students, he said. There also is no evidence the Gibson’s apartments would be 100 percent occupied for the next 30 years, or that the family will suffer damages as landlords over the matter, Saari testified.

“I have not seen any documentation that the vacancies ... will continue for 30 years or were attributable to Oberlin College or the protest,” he said. “That no one will want to live there is speculative. ... The premise that Gibson’s apartments would be 100 percent occupied for 30 years is based on no evidence.”

Gibson’s sued both the college and its vice president and dean of students, Meredith Raimondo, for libel, interference with business relationships, interference with contracts, intentional infliction of emotional distress and trespass, and the college for negligent hiring, retention and supervision, in 2017.

The Gibsons have accused Raimondo and other college employees of stirring up student anger against their business and helping students plan and carry out the protests, an allegation college employees and the college deny.

Saari testified that as a financial expert, he wasn’t surprised Oberlin College ceased its business relationship with the bakery after the lawsuit was filed.

“I wouldn’t expect to continue to do business with someone who has sued me,” Saari testified.

Chris Jenkins, associate dean for academic support at Oberlin College and equity coordinator at the Oberlin Conservatory, testified Thursday while he was willing to help students make flyers to hand out outside Gibson’s the day of the protests, he was too busy and instead directed the students to go to the Student Union and use their own funds.

“Our students, like all people, are free to express themselves if they do it peacefully and lawfully,” Jenkins testified.

Jenkins said part of his job is to “help resolve allegations of inequality and harassment” on campus. He testified he bought pizza for a group of students about the time of the protest but did not know if they were protesters and denied it was he who wrote the word “protesters” on a departmental purchase order for the pizza, a document that was entered as evidence at trial.

Gibson’s attorneys twice objected to Jenkins’s testimony: Once when he described “perceived racism” in reference to student experiences at Gibson’s and another time when he began to say “I personally have had moments in the store ...” before he was cut off and attorneys held a sidebar conference with Judge John Miraldi.

Oberlin College stopped ordering from the bakery after the protests, resumed its orders in January 2017 then again stopped buying from Gibson’s after the family filed suit in November 2017.

Oberlin Police Lt. Michael McCloskey also testified Thursday that he expected the college to be a “socially responsible community member” and try to quell the protests before they became violent and required riot police to keep order.

“I believe there was an opportunity to be a moderating voice and prevent the protest,” he testified. McCloskey also said he did not know when the protest was supposed to happen before it did, and did not ask college administrators to stop the protest.

The Oberlin Police Department, he testified, has taken no position on whether Gibson’s or its owners are racist or take part in racial profiling of customers or shoplifters.

Thursday was the trial’s 13th day of testimony, which resumes at 9 a.m. today.

Contact David O’Brien at (440) 329-7129 or do’brien@chroniclet.com. Follow him on Twitter @DaveOBrienCT.

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