Even before the South Jersey Economic Development District board was scheduled to decide Gordon Dahl’s fate, its longtime leader threatened to sue the organization if it pursued plans to eliminate him.

Now, Dahl has followed through on that promise, filing a lawsuit alleging he was wrongfully removed as executive director. He is seeking reinstatement and unspecified financial compensation.

After leading the district for 25 years, Dahl was ousted in April with a unanimous vote of no confidence by his board, whose members said they were largely unaware of financial and business decisions Dahl made that landed the district more than $1 million in debt.

The lawsuit filed in state Superior Court on Dec. 6 claims the district violated the terms of his contract by removing him earlier this year. His most recent contract, dated Feb. 4, 2008, has no term length and states that the agreement will renew each year on Feb. 4 unless notification is given 30 days prior of any intention to sever employment. No performance evaluations were required.

“The breach of contract was intentional and outrageous, such that the plaintiff is entitled to damages for the emotional distress he was forced to suffer,” the lawsuit states.

Dahl was fired from his $112,000 job earlier this year after it was discovered the district was two years behind on audits, had fallen into significant debt while leading the NextGen Aviation Research and Technology Park project and was refusing offers of help from other organizations without board approval. Dahl’s salary also increased by more than 40 percent between 2006 and 2011 with no formal documentation that raises were approved.

The amount that Dahl is seeking is not stated — a marked change from his earlier communications, including a tort claim in which Dahl said he would seek as much as $7.5 million in damages. The most recent filing also differs in that it only addresses a potential breach-of-contract issue.

Previous communications filed on Dahl’s behalf by Mount Laurel, Burlington County-based attorney Kevin Costello indicated Dahl’s grievances would extend further, claiming that coercion and illegal methods were used to terminate him. Costello did not return a phone call on Monday.

A letter sent by Dahl to the SJEDD’s board before its no-confidence vote earlier this year alleged a “conspiracy of defamation and tortuous interference,” as well as coercion by an unidentified federal elected official. Those issues were not addressed in the lawsuit.

Steve O’Connor, the SJEDD’s interim executive director, said the district has not yet been served with a copy of the lawsuit, but once it has been received it will be forwarded to its insurance carrier, RSUI Indemnity Co., based in Atlanta. Locally, Spector Gadon & Rosen, of Philadelphia, will be assigned to the case, said O’Connor, who would not comment on the the lawsuit’s claims.

For months, O’Connor has been charged with making sense of the cash-strapped district’s finances. His plan has included letting go of the district’s two remaining employees and moving out of its rented space on North High Street in Millville in favor of a free space provided by Cumberland County. The district has adequate legal protection through insurance, he said. The SJEDD’s yearly deductible is $15,000, of which about $2,500 has been paid.

Since Dahl’s departure, more missteps have been discovered. More than $390,000 was discovered missing from the district’s revolving loan funds, money that was purportedly used to finance installation costs for infrastructure at the NextGen park. At one point, almost $150,000 was still owed on a flight simulator being used by Atlantic Cape Community College, unbeknown to school officials, and a firm hired to oversee the district’s grant distribution recently said that half of the district’s files on some projects are missing.

The lawsuit states that Dahl performed his job duties up to and beyond reasonable expectations at all times.

His most recent contract, which is attached to the lawsuit, states that Dahl was expected to monitor all funds received and disbursed by the district, including the revolving loan funds.

A letter sent to Dahl by the U.S. Economic Development Administration earlier this year states that the district lacked proper documentation of financing in those accounts and demanded that Dahl produce a deposit slip proving that deposits were made.

The district’s 2012 financial audit is expected to be complete by the board’s January meeting.

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