By Nicole Montesano • Staff Writer • 

Falls Event Center sues two detractors

News-Register file photo##The Evergreen Wings & Waves Water Park, owned by the Falls Event Center.
News-Register file photo##The Evergreen Wings & Waves Water Park, owned by the Falls Event Center.

The Falls Event Center has filed a federal lawsuit against two area businessmen, claiming they set out to cause malicious harm to the company in order to further their own ends.

The Utah-based company, which owns major portions of the Evergreen Aviation & Space Museum campus in McMinnville, is seeking $25 million.

The plaintiff alleges defendants J.W. Millegan of McMinnville and Paul Peterson of Beaverton conducted a “campaign of disseminating false and misleading information against TFEC and its business activities, with the goal of causing TFEC financial and reputational distress, and to default on its financial obligations, so that defendants (could) acquire TFEC’s business properties for substantially less than market value.”

Peterson said he runs an educational nonprofit program at the museum, in addition to sitting on the museum’s educational committee. He described himself as a museum “contributor and supporter.”

He said he hadn’t been served with a copy of the suit yet. But he said, “I’m surprised and shocked. You would think The Falls Event Center would have better things to do than to harass an educational nonprofit at the Evergreen Museum.”

Initially, Millegan angrily denied being the target of legal action. He subsequently did an about-face, saying he welcomed the federal lawsuit.

He described The Falls Event Center as a “Ponzi scheme that has stolen money and ... taken McMinnville, the News-Register and the museum for a ride.”

The Falls Event Center purchased part of the museum campus a year ago, out of bankruptcy proceedings. It now owns the water park, chapel and space museum exhibit hall.

It is operating the water park and has converted the chapel into an event venue. It is leasing the other facilities to the museum at favorable rates in order to facilitate the museum’s continued operation on a viable basis.

According to the lawsuit, the company paid about $11 million for the property and owes its lenders about $5 million used as financing. It says the property is actually worth “between $111 and $114 million.”

The company alleges Peterson and Millegan tried to purchase the lenders’ first secured position.

“At the same time,” it charges, they “engaged in conduct designed and intended to injure TFEC financially,” as well as damaging its reputation and fomenting  discontent among its investors, partners, vendors and lenders.

The company claims Millegan, perhaps best known locally for mounting a failed bid to establish a sprawling equestrian center in the West Valley, “sent an e-mail to one of TFEC’s nonprofit partners, with whom TFEC shares its funds, falsely stating that TFEC’s funds were the result of a ‘Ponzi scheme.’”

In addition, it states, the defendants “had similar communications with TFEC’s vendors and its lenders,” “fraudulently sent or caused to be fraudulently sent inaccurate and improper information through the U.S. Mail to TFEC’s investors, lenders, potential investors and potential lenders,” falsely claimed to represent TFEC and “contacted and fed false and/or misleading information to news outlets for publication, including, but not necessarily limited to, The Oregonian and the Yamhill Valley News-Register.” It alleges they also “caused the biography page of TFEC’s CEO on Wikipedia to be repeatedly changed, altered and amended so as to contain false and/or misleading information.

“As a direct and proximate result of defendants’ actions,” the company alleges, “the reputation of TFEC has been substantially and severely damaged, and TFEC has been substantially and severely damaged economically, in an amount to be proven at trial and not to exceed $20 million.” In addition, it is seeking pre- and post-judgment interest, court costs and expenses, along with $5 million in punitive damages.

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