May 14, 2014 – In a “bet-the-company” case, Krokidas & Bluestein lawyers Vince Pisegna, Janet Lundberg and Jill Meixel persuaded a Superior Court Judge to decline to appoint a receiver to sell a Massachusetts manufacturing company owned and operated by their clients in order to satisfy a $20.0 million judgment. The case began in 2000 when a minority shareholder in the company sued the clients, majority owners of the company, alleging that they had extracted excessive compensation from the company for many years. In a 2005 trial (at which the clients were represented by a different law firm), the Superior Court ruled in favor of the minority shareholder and ordered the clients to pay approxi- mately $10.0 million dollars. Following lengthy unsuccessful appeals by the majority shareholders, the minority shareholder returned to Superior Court arguing that (1) the majority shareholders now owed $20.0 million due to the accrual of interest, and (2) since the primary asset owned by the defendants was their interest in the company, the Court should appoint a receiver to sell the company and give the proceeds to the minority shareholder. Krokidas’ defense was two-fold: first, they contended that requiring the sale of a company to satisfy a minority shareholder derivative suit was contrary to state law, and second, and more importantly, they asked the Court to appoint a Special Master to study the situation and recommend a solution that would save the company yet give the plaintiff a remedy that compensated him for his losses. The Court agreed to appoint a Special Master who, at the request of the Court, filed a confidential report, after which the case settled on terms that are also confidential. Thanks to Krokidas & Bluestein’s creative lawyering, the company was saved and remains in good standing today with the majority shareholders as sole owners and operators.
About Krokidas & Bluestein
Krokidas & Bluestein provides legal services in the areas of public, nonprofit and for-profit general corporate law, health and education law, real estate development, finance and property management, public and private civil litigation, labor and employment law, and social services law. The firm is certified by the Commonwealth of Massachusetts Executive Office for Administration and Finance Supplier Diversity Office (formerly known as the State Office of Minority and Women Business Assistance) as a woman-owned business enterprise.
