A son of the late bandleader Lawrence Welk is being countersued by his own offspring and other members of the board of directors of Welk Group, who state in new court papers that they believe he spent thousands of organization dollars on personal trips and on other inappropriate uses of the money.
The group also learned in October 2022 that Lawrence Welk Jr. had been paying himself an annual bonus of $200,000, nearly equivalent to his annual salary, for many years preceding without board approval, according to the countersuit brought July 1 in Los Angeles Superior Court, alleging breach of contract, misrepresentation and that Welk Jr. put his interests ahead of those of the organization.
The countersuit seeks unspecified compensatory and punitive damages and was filed the same day the Welk Group brought a motion seeking a court order that Welk Jr., who alleges he was wrongfully ousted as CEO at age 82, is obligated to arbitrate his claims rather than have a jury trial.
Under Welk Jr.’s tenure as CEO, the hospitality assets, and a majority of the music assets of TWGI and its affiliates were sold or spun-off and then sold, and a property manager and asset manager were contracted to manage the three remaining real estate assets, according to the countersuit.
The countersuit states that the Welk Group believes that expenses Welk Jr. said were related to the business were actually spent on private jet trips, luxury hotels and birthday dinners for a family member.
“Prior to TWGI’s discovery of the … facts, TWGI did not know of facts that would have caused a reasonable company to suspect that it had suffered harm that was caused by someone’s wrongful conduct,” the countersuit states.
Welk Jr. started the dueling litigation by suing the Welk Group; the plaintiff’s son, Kevin Welk; and Kevin Welk’s fellow board members, Jonathan Fredricks and Stephen Baron. The suit brought Feb. 6 alleges wrongful termination, age discrimination and failure to prevent discrimination.
The Welk Group was incorporated in 1955 as Lawrence Welk Enterprises in recognition of its founder. Over the years, the name was changed and the entity merged with other businesses formed by the television personality, including Welk Melodies Inc., Welk Record Group, Welk Desert Properties and Welk Properties.
Welk Jr. was appointed CEO of the Welk Group in 1980 when his father’s failing health left him unable to continue in that role, according to the suit, which further states that the plaintiff had earlier founded Heartland Records, a recording company that offered records by popular artists through direct sales on television.
Welk Jr., who also was a director, grew the Welk Group’s existing recording company, Teleklew Productions, through the acquisition of a music publishing business later sold to Polygram Records, the suit states. Under the plaintiff’s guidance, the Welk Group also acquired popular labels Vanguard Records, which Welk Jr. revitalized, and Sugar Hill Records, the suit states.
During these years, Vanguard claimed three consecutive Grammy Awards for Levon Helm, multiple Grammy Awards for Robert Cray and a certified platinum single for Matt Nathanson’s “Come on Get Higher,” according to the suit, which further states that Sugar Hill Records won Grammy Awards for recordings by Dolly Parton and Nickel Creek.
Welk Jr. also expanded the company’s interests into real estate that provided funds to support marketing of his father’s music and shows, the suit states.
“At no time during his 42-year tenure as CEO did the board of directors of the Welk Group criticize plaintiff’s performance,” the suit states.
However, Kevin Welk, Fredricks and Baron voted in late 2022 to amend the Welk Group’s bylaws to restrict the maximum age of a director to 74, making Welk Jr. ineligible to continue to serve after his term expired, according to the suit, which also states that the plaintiff was the only person impacted by the new bylaw.
The three directors also voted to eliminate the position of CEO effective immediately and told Welk Jr. he would be paid through November 2022, the suit states.
Although told his position was being eliminated, the three directors created a new position of president that was filled by Fredricks, who performed many of the same duties that Welk Jr. had as CEO, the suit states.
A hearing on the defense motion to compel arbitration is scheduled for Feb. 5 of next year before Judge Theresa M. Traber.
Lawrence Welk died at his Santa Monica home at age 89 of pneumonia in May 1992.