Relationships between business partners can sometimes sour. And other times, they can turn downright ugly.
CMM’s client, a well-respected environmental engineering firm with multiple locations, reported that one of its shareholders (who was also an employee) had abruptly resigned. He began intimidating the company with bogus criminal complaints and threats to report them to governmental agencies, with the sole aim of gaining an advantage in buyout negotiations. He also continued to communicate with and intimidate the company’s employees and consultants. On top of that, our client also learned that the shareholder had violated the duties he owed to the company during his tenure as an officer by commingling business and personal funds, among other wrongdoing.
The shareholder’s egregious behavior had the potential to damage the company’s reputation and business relationships and resulted in delayed business operations and unnecessary costs. Our client therefore sought to restrain the shareholder from any further dealings with the company. In addition to filing a Complaint against the shareholder, CMM moved by Order to Show Cause for a temporary restraining order barring the former shareholder from accessing our client’s credit line or bank accounts, interfering with our client’s business operations, contacting our client’s customers or potential customers, inducing employees to leave the company, or interfering in our client’s day-to-day business operations.
Thanks to the hard work and extraordinary advocacy of senior partners Scott Middleton (who argued the motion in court) and Patrick McCormick, associates Richard DeMaio and David Green, and paralegal Kathleen Johnson, the Court granted all the relief we sought. The Court agreed with CMM’s arguments that the defendant’s continued misconduct violated both the Shareholder’s Agreement and his fiduciary duties. Our client can now move forward by parting ways with the shareholder and starting the company’s next chapter.
Learn more about our wealth of experience handling all types of business divorce matters here.