The fate of the famed Apollo Theatre rests in the hands of Judge Ira Gammerman. The Manhattan Supreme Court jurist is considering whether to remove the board of directors. He should do so without hesitation.

Armed with ample evidence that the board failed in its legal duties to guide and protect the state-owned theater, State Attorney General Dennis Vacco petitioned the court to appoint a receiver. A bizarre legal defense the board has adopted shows why a change is essential if the theater is to thrive.

Members of the board have used everything from high-priced legal talent to behind-the-scenes mud slinging to defend themselves. But the most imaginative effort comes from lawyer Dan Kurtz, who represents the nonprofit foundation that runs the theater. Kurtz claims that contract wording that led to the fiscal finagling was merely a "draftsman's error."

When it was pointed out that the contract was signed by all parties six years ago, Kurtz told this page, "Yeah, but they meant to sign a different deal." In other words, the board wasn't corrupt; it was asleep at the switch. Hardly reassuring.

At issue is a deal signed in 1992 with Percy Sutton's Inner City Theatre Group for the lucrative TV program "It's Showtime at the Apollo." The contract specifies that the Apollo Theatre Foundation was entitled to 25% of "net profits," which the contract defined as gross revenues. By that definition, the foundation should have reaped $4.4 million over five years. It received only $200,000. Blame the somnambulant board, which never even bothered to examine Sutton's books.

But, says Kurtz, that's because no one on the board was aware of how the contract defined profits. According to him, the foundation believed it was supposed to receive 25% of the profits — revenue minus expenses. Which, by entertainment industry standards, would have meant 25% of nothing. Agreeing to such a deal would have been the height of irresponsibility.

The Los Angeles-based syndicator of the TV show, Western International, wasn't bamboozled. It took its 25% off the top of the $26 million in show revenues, for a $6 million payday. Meanwhile, the Apollo had to beg Sutton for its measly $200,000.

The "draftsman's error" defense is a defining moment. First, the board signed a deal that worked to its benefit, then it failed to take advantage of that benefit and now it claims the contract was a mistake. Phew!

New voices, new ideas and renewed vigilance are desperately needed at the Apollo. Gammerman must clear the decks so the crown jewel of 125th St. can sparkle again.