Gatling, however, according to a response to the Chicago businessman’s countersuit last month, has not tendered any payment to the city since May 3 while the city has continued to honor its financial obligations.

City Attorney Gilbert Chichester filed the response today in Halifax County Superior Court.

“The defendant at all times while presenting its purchase and operating proposals represented to (the city) that it was financially sound and had the staff and knowledge to operate the theater in a profitable manner,” the response says. “It is admitted that (Gatling) expended effort and resources and that the plaintiff assisted defendant with good public relations. It is further alleged that (the city) complied with its obligations under the terms and conditions of the aforesaid agreements.”

The city claims, however, Gatling paid it $1,446,327.51 before it defaulted on the agreement. “Representatives for plaintiff made many efforts to assist defendant, including, but not limited to meeting with financial institutions, meeting with a grant writer to help access grants and stimulus monies and meetings with city, state and local representatives.”

While the city agrees Gatling asked for more help, it says it expended time, resources and effort to assist Gatling and more than complied with its obligations.

Chichester writes in the response, the city denies it withheld support from Gatling. “(The city) started to consider other alternatives for the use and operation of the theater property upon advice of counsel when it became clear that (Gatling) was not capable of operating the property and was at risk of defaulting upon its financial obligations to plaintiff.”

While the agreements the city and Gatling entered into are enforceable, the response says, “It is further alleged that (Gatling) has committed material breaches of the agreement and (the city) gave repeated notices to defendant and finally declared (Gatling) to be in default.”

The city acted in good faith, the response says, and did not engage in any illegal or wrongful acts. “Plaintiff at all times dealt with (Gatling) in a manner that was fair and in good faith and after defendant defaulted, plaintiff was obligated to protect the property of its citizens. (The city) moved to protect the property of its citizens when the evidence was clear that (Gatling) had committed multiple breaches and was in default of its obligations.”

The city says Gatling has no legal or equitable rights in the city’s property. It does agree the city entered into a long term contract with Gatling until he defaulted.

The city asks the court to dismiss the counterclaim, deny Gatling’s claim for relief, grant the city’s motion to strike Gatling’s defenses and grant the city relief as requested in its original complaint.