NEW LEBANON–First it was the strip club that wasn’t, now it’s a swingers club that isn’t.
An August 12 story in the New York Daily News first reported that Milton “Todd” Ault III, a California investor, is being sued by several hedge funds that invested in his firm, Zealous, Inc., accusing him of putting their $4.2 million investments into porn and a planned “swingers ranch” here. The lawsuit, which erroneously puts New Lebanon in “the Catskills,” says the facility was planned for a site on Wadsworth Road.
The suit, filed in state Supreme Court in Manhattan, and the news story that reported it put the town on the map. A Google search found the story has been picked up on sites all over the world.
Although the suit said that Mr. Ault purchased a 130-acre plot of land at 77 Wadsworth Road, County Clerk Holly Tanner said that there is no number 77 on that road. Nor do land records in either the town or the county show ownership of property on the road in the name of Mr. Ault or companies publically identified with him.
Mr. Ault told The Columbia Paper that the lawsuit is fraudulent. The hedge funds were told that the company “had land to sell off,” he said, “that we had other assets.” He said the funds are suing because “a year after their investment, the market collapsed.” Mr. Ault said the funds had gotten a million dollars back but aren’t satisfied.
He said that he purchased land on Wadsworth Road in a trust in the name of attorney Lisa Molinari. “They’ll hold the title until the land is paid for,” he said. The land had been owned by “an investor guy I knew.”
The market was “pretty poor” at the time, and it looked like the property was worth more for its “break-up value,” he said. He said he paid $2.9 million for the land. The property overlooks a lake and has a barn, and he said that an application has been filed to subdivide the parcel into eight lots. “Our plan was to build nice, single-family homes overlooking the lake.”
And what about the swingers club? Mr. Ault said that came up in conversation with Old Chatham resident Mark Graff as the two men were entering a business relationship, changing the name of Zealous, Inc., to Adult Entertainment Capital, Inc. Mr. Ault said that when Mr. Graff, the founder of Playgirl TV and Spice Entertainment, asked what his plans were for the property, “We joked about time shares for swingers.”
But Mr. Ault said Mr. Graff told him that New Lebanon is a very conservative town and a swingers club wasn’t likely to happen. Mr. Graff also reportedly told him that New Lebanon is “less likely to have swingers in the town than bikers.”
The swingers club story follows by only a few months another local joke that found its way onto the web and into community discussions. Two years ago garage owner Louis “Bud” Godfroy III asked town officials for an application to establish an adult entertainment business, but his request was a symbolic protest, said Mr. Godfroy, who was frustrated after the town increased his assessment by 250%. Though he said he never planned to apply for an adult entertainment business, word of his request for the application made its way into an online real estate listing.
To contact Gail Heinsohn email gheinsohn@ColumbiaPaper.com