Dr. Steve Perlaky testified Monday that he fired his brother, Bob Perlaky, the longtime manager at the Raccoon Mountain Caverns and Campground, because "we're not making money, and there is something wrong with this picture."
Bob Perlaky said things are finally turning around at the Lookout Valley attraction, saying it grossed $1,335,000 last year and is already ahead of that total this year.
Bob and Jeff Perlaky, another brother, are seeking a permanent injunction against Dr. Perlaky from turning the attraction over to the management of a national firm - RVC Outdoor.
The case is being heard by Chancellor Jeff Atherton.
Bob Perlaky said his brother summoned him for help soon after purchasing the campground and caverns in 1995 for $350,000. He said he agreed to become the manager after being guaranteed a salary of $35,000. He said his brother also promised to give him an equal share of ownership if he could turn it around.
"It was definitely a fixer-upper," said the 54-year-old Bob Perlaky. He said the attraction, which was started in the early 1930s, had gotten rundown and was losing money. "It took a lot of time and a lot of money."
He said his partner in a computer firm and another entity, John Gartrell, also had a share of the business.
Dr. Perlaky denied that he ever promised a larger share to his brother Bob. He said he (Steve) owns almost 80 percent, Bob Perlaky and Mr. Gartrell, a Texas resident, have 10 percent each, and younger brother Jeff Perlaky just a tiny amount.
Bob Perlaky said he and Jeff live in a unit on the property, and that their sister, Patty Perlaky, also works there running the cave portion.
He said the attraction is having "a tremendous year." He said it gets a higher rating on the travel website TripAdvisor than do the nine RVC Outdoor sites. He said sometimes the site is full and people have to be turned away. He said the initial $300,000 loan has been paid off and the facility is debt free. He said five cabins he brought to the site are a draw.
Bob Perlaky said after the adjacent Cummings Cove (now Black Creek) bought the former Alpine Slide and closed it in 1999 that he opened a go kart track and then added a Pirate-themed miniature golf course. He said the business has a thriving sideline of selling gem bags (containing nine different minerals) to other attractions.
He said it was often difficult to get in touch with Dr. Perlaky, who is an emergency room doctor at a hospital in Cleveland, Tn.
Bob Perlaky said, after all those years, his salary has only gone up $1,000 to $36,000.
The other side called accountant Joe Miller, who said records showed that Bob Perlaky paid himself $60,000 in salary last year. He said Jeff Perlaky got $40,499, Chris Perlaky $12,232, and Patty Perlaky $44,570.
The accountant said when he started doing the year-end taxes in 2006 he was told there was a liability owed by the company to Bob Perlaky's computer firm. He said Bob Perlaky said that was for computer services for the campground. Mr. Miller said that was paid down from $94,741 to $87,241 during 2014. Bob Perlaky said that is no longer a liability of the company.
Mr. Miller said there were over $181,000 in credit card charges at the campground and caverns last year. He said he checked with Bob Perlaky and he affirmed all the spending was business related. Dr. Perlaky said he had asked for backup on the credit card charges and Bob Perlaky declined, saying he did not want him knowing what he spent money for.
Bob Perlaky, in turn, said it is necessary in many cases to do business with credit cards. He said Dr. Perlaky had access to all company records.
Mr. Miller said the company for some years paid the health insurance for Dr. Perlaky and his family. It amounted to over $19,000 last year.
The accountant said he was aware that Dr. Perlaky had started a business with attorney John Wolfe of charging all-terrain vehicle owners for use of his property on Aetna Mountain. Dr. Perlaky confirmed that one of the ATV riders had been killed on his property in June. He said he does not have insurance for the business other than a rider on his personal policy.
The Perlakys have long battled the developers of Black Creek over access to the top of Aetna Mountain along the old Aetna Mountain Road.
Bob Perlaky said attorney Wolfe was with Dr. Perlaky on Oct. 31 when he was told he was fired. He said the pair was accompanied by "two goons." He said, "I guess they intimidate you."
He said he was handed a letter by Dr. Perlaky as he was trying to help a woman into the campground bathroom. He said it asked that he be given control of all the bank accounts, computers, etc., at the business. He was told his last day would be the next day.
Dr. Perlaky said he has signed a contract with RVC - Outdoor, and the firm is training a manager and assistant manager. He said the new manager's first name is Renee.
He said he visited the RVC unit at Little Rock and "it was immaculate. Ours has trash everywhere."
Dr. Perlaky said most of the 41 current employees at the attraction will be retained until they can be evaluated by the new team.
He said RVC says the campground should be providing a return of over 30 percent instead of two percent. He said the business will get to keep the first $125,000 of profits, then will get 70 percent of profits after that.
Dr. Perlaky said he has agreed to take on some long-term debt to help spruce up the facility.
He said changes need to be made at the go karts, which he said have expenses of $121,000 for three employees. He said he was advised the most that was ever made there was $36,000 in a year. The Bob Perlaky side said it was $57,000.
Dr. Perlaky said Raccoon Mountain Caverns and Campground showed an $80,000 profit on paper last year, and he had to pay $64,000 in taxes on it "but I did not get a dime from the company."
He said he wanted to take $15,000 from the business to buy his wife a car for her 50th birthday, "but Bob said no."
He said he hired attorney Hannah Stokes to send two certified letters to Bob Perlaky demanding company information, but there was no answer. He said he was rebuffed when he tried to bring in a forensic accountant to examine the books.
Dr. Perlaky said he earlier started a firm that dealt in grants with the National Institute of Health. He said he also called on his brother, Bob, to help run that company. He said he recently found that he (Steve) was getting $52,000 a year from the firm, S&P, but over $250,000 went to Bob Perlaky, John Gartrell and their companies.