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Para 1-31 read:
JURISDICTION, VENUE & PARTIES
1. The Montana District Court has original jurisdiction pursuant to MCA § 3-5-302.
2. Venue is proper in Missoula County pursuant to MCA §§ 25-2-118, the county of the principal place of business of Defendant.
3. James H. Cossitt (“Cossitt”) is a natural person, a citizen of Flathead County Montana and a dual resident of Montana and Iowa.
4. Cossitt became a member of Bikecentennial 76, the predecessor organization of ACA, in 1975. He became a life member of ACA in about 2006.
5. Cossitt was a member of the State Bar of Montana from 6/25/1998 to 3/31/23 (SBM # 4773) was in private practice full time in Kalispell during the same time period. Cossitt remains licensed and in good standing in the state and federal courts of Iowa.
6. Adventure Cycling Association (“ACA”) is a Montana non profit corporation with a principal office or place of business in Missoula Montana. It is the successor entity to Bikecentennial 76, (“B-76”), a Montana corporation.
7. Sterling CRE Advisers is the dba of Sterling Commercial Management LLC (C1041758), a Montana Domestic Limited Liability Company with an office at 2829 Great Northern Loop, Suite 200 Missoula, Montana 59808.
ALLEGATIONS COMMON TO A LL COUNTS
BACKGROUND & HISTORY of B-76 and ACA: BIRTH & YOUNG ADULTHOOD FROM 1974 to 1991
8. As an organization, Bikecentennial was created in 1974 to organize a trans-America bicycle event along a dedicated route (the TransAmerica Bicycle Trail, mostly on rural roads) to celebrate the United States’ Bicentennial in 1976. 4,100 people participated in Bikecentennial by riding all or part of the route, individually and in small groups. By all accounts, the event was a huge success in promoting bicycle touring and contributing to an overall renaissance in cycling in America.
9. Following the 1976 event, Bikecentennial aimed to become a more diversified organization with a full program supporting bicycle travel around the United States. However, funding support evaporated and staff was reduced to just three paid personnel.
10. The organization stabilized and eventually rebuilt itself through direct mail appeals. As staff positions were added back, Bikecentennial developed a routes and mapping program, guided tours, and a printed magazine. Membership grew steadily and was the primary form of financial support. From 1974 to 1991, the organization operated out of rented offices in Missoula, Montana.
11. In 1992, the name of the organization was changed from Bikecentennial to Adventure Cycling Association (ACA).
MID LIFE STABILITY & THE BUILDING AT THE HEART OF THIS DISPUTE: THE ACA HQ
12. In 1991, the organization had the opportunity to purchase a permanent home, in the form of a church and connected offices at 150 E. Pine Street in downtown Missoula. Bikecentennial was able to secure grants and loans at favorable terms in order to buy and renovate the property but needed a long-term revenue stream to pay off the loans and cover further building improvements.
13. Also in 1991, the Bikecentennial board of directors authorized the use of a Life Member Fund, which had been established in 1988, for the purpose of covering costs (mortgage payoff and improvements) related to the building. Individuals or couples could make a one-time payment for a life membership. A portion of the payment would be reserved to cover the projected costs of the membership and the remainder would go into a dedicated Life Member Fund for building-related costs. For more than two decades, life memberships were promoted and sold with the guarantee that the proceeds would be used only for building-related costs, such as mortgage payments, renovations and repairs.
14. ACA’s building at 150 E. Pine Street was renovated multiple times between 1991 and 2019, and expanded significantly (to 10,000 square feet) in 2012-13. The headquarters was purpose-built as offices (for more than 40 staff plus volunteers), visitor center (especially for traveling cyclists), archive and museum (displaying treasures and artifacts related to bicycle travel and ACA’s history), library (with hundreds of historic volumes and photographs), and meeting and gathering places.
15. The expansion and renovations were specifically designed to create a state-of-the-art workplace for employees and museum and gathering place for members and other visitors. The building was also sensitive to the urban fabric and feel of downtown Missoula, and the expansion project earned a local historic preservation and design award.
16. The expansion and renovations were paid for primarily by the Life Member Fund, which continued to grow, at least through 2019. Through 2013, the Fund was devoted exclusively to investments in the headquarters building. Later, the Fund was used for a few projects (such as development of a navigation application for ACA’s bicycle route network), which were considered to be one-time capital investments in the long-term functioning of ACA and its programs.
17. The Life Member Fund was always characterized – and used – as a dedicated fund to purchase and improve ACA’s long-term home and headquarters in Missoula, and several other one-time capital investments. The Fund was not used for regular ACA operational expenses. Individuals and couples who bought life memberships believed that they were becoming part of the organization for the long haul, and were investing in the long-term health and stability of ACA.
18. The Life Member Fund was regularly replenished with hundreds of new members and by 2020, despite having been tapped for major building costs, exceeded more than $1 million. Meanwhile, the expanded and revamped headquarters was fully occupied by more than 40 staff (plus volunteers) and was a globally beloved “mecca of bicycle travel” attracting more than 1,000 long-distance bike travelers annually. The building was at the heart of ACA’s huge 40th anniversary celebration in 2016.
19. ACA continued to grow as an organization, all the way through 2020. The organization was the largest cycling membership organization in North America with more than 54,000 members. ACA employed 42 staff and had a 2020 budget of $6.9 million, up from $2.5 million in 2005.
20. Starting in 2020, and especially since 2023, ACA experienced a precipitous membership, financial and programmatic decline. Membership has dropped below 20,000. Income has dropped below $5 million (or possibly $4 million). Staff now numbers 17. Programs have been slashed, with steep drops in tour offerings (from more than 100 to 18 in 2026), elimination of most of the sales and advocacy departments, and a large reduction in the page count and editions of the organization’s award-winning magazine, Adventure Cyclist. Additionally, the organization’s operational reserves were tapped and reduced by nearly $2 million and the Life Member Fund was also
ACA ANNOUNCES IT INTENDS TO SELL THE HEADQUARTERS BUILDING IN JUNE 2025. FOUNDING MEMBERS & LONG TERM SENIOR STAFF CREATE AN INFORMAL GROUP TO CONTACT ACA & REQUEST THE BOD CONSIDER LESS DRASTIC ALTERNATIVE OPTIONS
21. On 6/25/25, in a Quarterly Board Update – June, A Message from the Adventure Cycling Board of Directors, the BOD announced:
Dear adventure cyclists,
The Adventure Cycling Board of Directors recently decided to put its longstanding headquarters up for sale. We’ve made this conservative fiscal decision for multiple reasons and would like to share more information. . . . . . . . .
Signed, John McDermott, Board Chair; M. E. Price, Board Secretary
22. An organization identifying itself as Save ACA HQ – composed mostly of the four founders of Bikecentennial and former staff leaders who had orchestrated the purchase of the building, the creation of the Life Member Fund, and the growth of ACA through 2019 – conducted an analysis of ACA’s governance and finances over the last decade. They based the analysis on ACA’s audited financials (through 2024).
23. The analysis was delivered to the ACA BOD chair in August 2025 and identified multiple reasons for the precipitous declines, including poor fiduciary and management oversight by the ACA BOD. Of special note were:
a. the constant turnover in executive directors (in late 2021 and early 2025);
b. lack of rigorous financial oversight, which resulted in significant deficit spending and reserve drawdowns;
c. elimination of popular programs like advocacy; and
d. damaging decisions to dramatically increase member fees while deeply cutting services, such as tours and Adventure Cyclist magazine. (The service cuts and fee increases correlated strongly with the membership drop, which accelerated in 2023.)
24. On numerous occasions throughout the summer / fall of 2025 there were conversations between the SAVE group and ACA, at which time the parties discussed, inter alia:
a. the building being put onto the market and SAVE expressed it’s collective dismay at this decision;
b. the “engagement funnel” model and how it had been a niche that ACA occupied in the bike travel industry and the cornerstone of ACA’s success in the past. Neither the board chair nor the treasurer had any familiarity with this concept, or understood that by cutting programs, the board had dismantled the model, leading to the current downward spiral of the organization;
c. the condition of the current BOD; these meetings were between several SAVE members and John McDermott/Board Chair. It was stated by the board chair that many BOD members appeared to have been selected based on enthusiasm and not much else;
d. the various skills and expertise that were needed and offered to prepare a letter to the Board Chair recommending that the board needed to be re-vamped and describing said skills and expertise. We also described a “board matrix” of skills and expertise that was used by prior BODs; this was unfamiliar to the board chair;
e. the discussions briefly mentioned the 8/15/2025 white paper but not in any particular detail. The essence of the comments from the board chair was that “it was having an impact.”
ACA: 1) NEVER DISCLOSES THE SPECIFIC TEXT OF THE BOARD RESOLUTION or ACTION MEMORANDUM (WHATEVER THE BOD APPROVED) TO THE MEMBERS; and 2) PROVIDES THE MEMBERS WITH EVER SHIFTING DESCRIPTIONS OF WHAT IS TO BE VOTED ON.
25. On 10/13/25, in a “Highlights from the Member & Community Webinar, the ACA announced:
Dear Adventure Cycling Members, Being Transparent About Our Challenges
As part of our financial recovery plan, the board listed our Missoula headquarters building for sale in June. . . . . . . If we receive an offer, members will have the opportunity to vote on acceptance; these are your rights as a member organization, and we will honor them.
26. On 10/31/25, in an “ED Update: Challenges and Building Sale”, the ACA announced:
. . . . . . which is why we listed our headquarters building in Missoula for sale this summer. . . . . . Adventure Cycling has received an advantageous offer to purchase our Missoula headquarters building for approximately $2.55 million, . . . . .
We heard clearly from our members that preserving our physical presence in Missoula in our historical location is a priority. In response, as part of this sale, we have negotiated favorable terms to lease back storefront office space in the building. This ensures we maintain our local presence while providing community access to our historic bikes and memorabilia in a portion of the same beloved space that has been home to the organization for decades. . . . . . . Selling our headquarters provides a $2.55 million financial runway to rebuild Adventure Cycling . . . . . . The building is symbolic . . . . . .
27. In a 12/9/25 ED & BOD update, ACA announced:
“. . . . . we negotiated a purchase offer with an outside buyer that includes an agreement that Adventure Cycling will remain in the building as a tenant, releasing cash for needed investment . . . . , Montana law permits action without holding a member meeting. . . . . . there are additional steps to closing the sale. Wherever we land, you have our commitment to transparent information, regular updates on our progress, and maintenance of your membership rights.
28. In an ED & BOD update on 1/2/26, the ACA articulated the purpose of vote as:
Selling our building helps . . . . . . Casting a FOR vote means you authorize the board to evaluate and pursue the sale of the building under terms that are beneficial to the organization.
COSSITT REQUEST #1: THE ACA STONEWALL BEGINS - COSSITT MAKES HIS 1ST WRITTEN REQUEST TO INSPECT THE RECORDS OF ACA, TO WHICH IT AGREES and NEVER PERFORMS ON THE AGREEMENT
29. In September and October 2025, Cossitt made a records inspection request to ACA as follows (“JHC request #1”):
“From: Jim Cossitt <jim.cossitt@gmail.com>
Date: Thu, Oct 16, 2025 at 12:15 PM
Subject: Questions & document request for BOD & for new Exec Director at Friday, Oct. 10 webinar
To: Jessica Zephyrs <jzephyrs@adventurecycling.org>
Jessica, Thanks for the response and nice to see you on the screen the other day. I still have not received any BOD minutes or the other docs I asked for from anyone at ACA, staff or BOD secretary. . . . . . . BTW, I practiced law in the Flathead for 25 years and live there about half the year, normally December to March / April. For 40 years I have specialized in debtor / creditor, bankruptcy, reorganization and insolvency. Accordingly, my interest in companies or non profits with $$ challenges / problems is likely much more significant than the average ACA member
Thanks Jim Cossitt, Cell: 406-260-6969
922 Thornton Avenue, Des Moines, IA 50315-3036
On Tue, Sep 30, 2025 at 3:42 PM Jessica Zephyrs <jzephyrs@adventurecycling.org> wrote:
Hi Jim,
Thanks so much for submitting your questions. I collected all questions and provided them to our Board Chair, new Executive Director, and Interim Executive Director to help them prepare for the upcoming webinar. Your input is greatly appreciated as it tells us what it most important to members. We've received a very wide variety of questions and many of them. I hope we can suitably address most of them during the webinar.
Best, Jessica Zephyrs she/her VP of Marketing & Communications
________________________________________
----------- Forwarded message -----------
From: jim.cossitt@gmail.com
Date: September 30, 2025 at 8:35 AM MDT
Subject: Questions & document request for BOD & for new Exec Director at Friday, Oct. 10 webinar
To: info@adventurecycling.org
Cc: governance@adventurecycling.org
Ms. Zephyrs, I submitted the following Q to the new Exec Director for the 10/10/25 webinar.
In the interim, can you please forward this to the Secretary of the BOD or other officer of the corporation for a response ?
"Please update us on the proposed sale of the ACA office, including specifics related to:
1. whether the BOD has reconsidered that decision and if so what the updated plans may be;
2. how the decision was made (when it landed on the radar screen, how many months it was under consideration by the BOD);
3. what notice was provided to the membership about the proposed action;
4. what other options were considered by the BOD, the relative pros / cons of each other option;
5. what business judgment justifications supported the selection of the sale option over the other options.
Please provide me with a copy of the minutes of all BOD meetings wherein this topic was considered or discussed well in advance of this webinar. Those minutes may shed some light on my questions.
Thank you. Jim Cossitt, life member, 1976 rider, TAWK601”
30. On 10/1/25, ACA consented to and agreed to the request:
From: John McDermott <john.mcdermott.email@icloud.com>
Subject: Your Questions for Adventure Cycling
Date: October 1, 2025 at 10:30:10 AM MDT
To: jim.cossitt@gmail.com
Jim, I am the Board Chair at Adventure Cycling. The Executive Director forward me some questions you had about Board decisions. You are certainly welcome to access Board Meeting minutes, but if a conversation with me would be more helpful, let me know and I’d be happy to set up a call,
John McDermott
31. To date, Cossitt has never received the requested documents and Mr. McDermott, speaking on behalf of ACA, as chair of the ACA BOD, has never made good on the commitment he made on behalf of the ACA.
