Judge Sanders of the Business Litigation Session recently denied the defendants’ summary judgment motion in a case alleging theft of confidential information by a 50% owner of an investment banking firm, Boston Equity Advisors, LLC (“BAE”). The complaint alleges that after engaging in secret negotiations to merge BAE with a competitor, Arnold Freedman, a 50% owner of BAE along with the plaintiff Mark Butts, left BAE along with one of BAE’s employees to join WWC Securities, LLC (later known as Outcome Capital LLC), that competitor. Prior to leaving BAE in July 2012, the complaint alleges that Freedman and the employee … Continue reading
In a follow up to a determination after trial on liability, two years later, Judge Saylor issued his partial ruling on the damages phase of the case in a summary judgment decision in Butler v. Moore. In this case, the individual parties were shareholders of a cell tower company, Eastern Towers, Inc. After the individual defendants sold off the company’s assets at well below their market value to newly-formed companies and usurped other opportunities of Eastern, the court found them liable for breach of fiduciary duty to the company. For more detailed factual background, see http://www.bostonbusinessdivorce.com/limited-liability-companies/calling-for-trouble-federal-court-finds-members-of-closely-held-cell-phone-tower-company-breached-their-fiduciary-duties/. The court’s damages decision … Continue reading
In a recent Business Litigation Session case, Tkhilaishvili v. Torosyan, Judge Kaplan enjoined the defendant from transferring the shares of an LLC pending the outcome of the case even though the Plaintiffs had failed to establish that they were likely to succeed on the merits. The details in the reported decision are scant, but lurid. In 2014, the parties opened a suboxone clinic called Allied Health and entered an operating agreement defining their rights. Torosyan, who had provided all of the financing to open the clinic, had a unilateral right under the operating agreement to manage Allied until his contributions … Continue reading
2015 was a busy year at OCM, which is partially why it’s been a while since I’ve posted on BBD. Here’s one of the products of our busy year: I edited the 2015 updated MCLE book entitled Damages, Interest and Attorneys’ Fees in Massachusetts. My partner Sean Carnathan and I updated Chapter 10 and added an entirely new section on damages available in corporate freeze out cases. If you’d like a copy, let me know – we have a few extras! I’d love to share them. Here’s the MCLE link for more information: http://www.mcle.org/product/catalog/code/1930278B00. Continue reading
Just when it seemed that the Demoulas feud had died down for the summer, the family was back in Suffolk Superior Court this past month. This time, the side of the family aligned with management of the Market Basket chain (the Arthur T. side) was seeking an injunction to block the issuance of $300 million in dividends to the company’s shareholders. The Arthur T. faction alleged that the board chairman, Keith Cowan, who had voted in favor of the large distribution, is not “independent”, as required by an earlier court order in the case. In response to the Arthur T. … Continue reading
It’s been said that a music band is like family; unfortunately, some families do nothing but fight. So it is with members of the J. Geils Band, who are embroiled in a legal battle over who has the right to use the band’s name. On one side is guitarist John Geils (aka J. Geils), on the other is the band’s four other members, who have used the name on reunion tours without the guitarist. Last year, John Geils filed a lawsuit in federal court in Boston, seeking a judgment that would stop the other band members from using J. Geils, … Continue reading
The Demoulas family is at it again! It’s been more than 20 years since the owners of the Market Basket empire started a long and nasty battle to decide how the company’s shares should be divided among family members. Fast forward to 2013, where the animosity between cousins Arthur S. Demoulas and Arthur T. Demoulas continues to make headline news. For years, Arthur S.’ attempt to control the company has been frustrated by a single member of his side of the family. For reasons unknown, that family member recently switched allegiances, so Arthur S. launched a campaign to oust his … Continue reading
In a decision that emphasizes the power of partnership agreements, the Court of Chancery in Delaware held that if a written agreement defines how assets will be shared when a partnership dissolves, partners cannot use a quantum meruit claim to increase their share. Quantum meruit is a ‘quasi-contractual’ theory of recovery that compensates an individual for work performed regardless of whether the benefited party expressly agreed to pay for the work. In the Delaware case, two lawyers decided to dissolve their partnership and entered into a liquidation agreement to distribute the assets. One of the partners later argued that he … Continue reading
Welcome to Boston Business Divorce, a blog by Attorney Tara Myslinski. We are located in Burlington, MA, and represent many individuals and small companies involved in shareholder disputes. All of our clients start their businesses with the best of intentions and expectations. All of them have involved some degree of trust in their business partners. They come to us because their trust has faltered, or in some cases, the relationship has entirely deteriorated and they are ready to file suit. In many cases, unfortunately, the relationship becomes pure animosity once litigation begins.
This blog is intended as a resource for those who are considering forming a small business, currently pursuing a healthy venture, or discovering differences among business partners. We can help you with analyzing your partnership agreement, limited liability company operating agreement, or by-laws. We are here to mediate a burgeoning dispute you have with your partners. If you have a dispute that has already come to a head, we are experienced trial lawyers who are here to litigate your case with the intensity necessary in a business divorce.
Tell me about your small business! I am constantly looking for topics for this blog and always looking to help out small business owners. Tell me about yours. Are you solidly protected by your operating agreement? Are you worried about the ownership structure or control of your company? How have you resolved potential conflicts among your company’s owners? What kinds of topics would you like to hear about in this blog? Click here to tell me about your business.
We are experienced in business divorce. The earlier you seek advice, the better. Please feel free to call us with any of your concerns, and check our blog frequently to learn about the latest in Massachusetts law on business divorce.