BEHIND THE NEWS: Brothers who built ticket broker now battling

The Kinnett brothers formed Front Row Tickets Inc. 16 years ago, and together they built it into one of the city’s largest ticket brokerages.

That success, how- fueled acrimony. Kyle ever, now has Kinnett, 35, has sued his 50-50 partner Scott, 36, and is asking a judge to appoint a receiver to oversee the business until it’s sold.

“Serious differences have arisen between Kyle and Scott concerning the conduct and management of the business,” leaving them deadlocked, according to the suit, filed in Marion Superior Court.

Scott declined to comment, saying: “Some matters, we want to keep under the roof.” However, according to Kyle, the dispute involves plans to separate the business into two-one focusing on national events like the Super Bowl and Final Four, and one focusing on local events.

Kyle said the national business is his bailiwick, while Scott’s is the local business. Kyle said the national business has many major clients and ranks among the 10 biggest firms in its field.

“We’ve both grown up. We’ve both got wives and kind of gone different directions,” Kyle said. “The dispute is strictly two brothers arguing over percentages” of the ownership stakes in the separated businesses.

Front Row Tickets is among the pioneers in the ticket-brokerage industry, a field once dominated by dealers of questionable repute. Though Front Row Tickets remains relatively small-its staff of five ramps up to as many as 20 during special events-it has built a client list flush with blue chip companies that place big orders.

The behind-the-scenes tussle is not affecting service, Kyle said. Indeed, the Consumer Protection Division of the Indiana Attorney General’s Office lists no complaints against the firm from customers.

More unclear, however, is how the dispute will affect the brothers’ relationship long term. The good news: At least they’re talking.

“I was at the Final Four and my brother helped me there. Last week, I had coffee with my brother,” Kyle said. “It’s unfortunate, but business is business, and there are large numbers involved.”

All-star investors score victory

In a big win for some of Indianapolis’ most prominent investors, the U.S. Court of Appeals in Chicago has upheld a $3.5 million court judgment against retired Detroit auto dealer Don Massey.

Massey’s attorneys have asked for a rehearing. But if the April ruling stands up, the judgment will go toward reducing the losses of the 58 investors who plowed $18 million into American Public Automotive Group, a now-defunct Carmel company once headed by James T. O’Neal Jr.

In the 1990s, O’Neal raised millions for what he said would be a publicly traded company that would open auto dealerships nationwide selling major American brands under one roof. The dealerships would be adjacent to shopping malls, capitalizing on their huge base of customers.

Backers here ranged from the Simon family and real estate developer Michael Browning to City Securities Corp. executive James Merten and music promoter David Lucas. Other prominent backers included professional golfer Scott Hoch and former San Francisco Giants owner Robert Lurie.

But the plan never got off the ground. In 1998, American Public Automotive ran out of money and slid into bankruptcy court-without opening or buying a single dealership. Last year, a grand jury indicted O’Neal, a Carmel native now living in Orlando, Fla., on charges he diverted nearly $7 million to fund a lavish lifestyle for himself and his family.

At issue in the Massey litigation was $2.5 million Massey received from O’Neal in the mid-1990s as a down payment to buy his dealerships. The appeals court upheld a ruling by Indianapolis federal Judge David Hamilton that Massey must repay the sum, plus interest, which now totals about $1 million.

Writing for the three-judge appeals panel, Judge Frank Easterbrook said the agreement between Massey and O’Neal was too sketchy to enforce and that allowing Massey to keep the money “would harm only the innocent outside investors, who are the chief victim of O’Neal’s misconduct.”

Massey has posted a $4.25 million bond, which should fully cover the judgment and interest that continues to accrue, said Andrew Hull, an attorney with Hoover Hull Baker & Heath representing American Public.

Ultimately, when all efforts to recover funds are complete, investors in the failed company might recover 22 percent of what they’re owed, said George Hopper, an attorney for investors with Hopper Blackwell PC.

Meanwhile, O’Neal, 59, is free on bond as he awaits trial on 82 felony counts of mail fraud, money laundering and filing false tax returns. If convicted on all counts, he would face up to 769 years in prison.

The trial is scheduled to begin Oct. 3 in Orlando and last six to eight weeks. O’Neal’s public defender could not be reached for comment.