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Butts, et al. v. Freedman, et al. (Lawyers Weekly No. 09-037-17)

1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT 1584CV03652-BLS 2 MARK BUTTS and BOSTON EQUITY ADVISORS, LLC Plaintiffs vs. ARNOLD E. FREEDMAN, ODED BEN-JOSEPH, and OUTCOME CAPITAL, LLC Defendants MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS’MOTION FOR SUMMARY JUDGMENT In 1999, the plaintiff Mark Butts and the defendant Arnold Freedman joined together to form Boston Equity Advisors, LLC (BEA), a limited liability company in the business of providing advice on matters of corporate finance, particularly in connection with the medical device business. Freedman and Butts each held a fifty percent interest. The defendant Oded Ben-Joseph worked for BEA beginning in 2010. In July 2012, Freedman and Ben-Joseph left BEA and joined the defendant Outcome Capital, LLC (Outcome), a BEA competitor. This lawsuit alleges various claims against the defendants, the primary ones being a breach of their fiduciary obligations and breach of contract. Specifically, the Complaint alleges that the defendants took with them certain confidential information of BEA and engaged in other actions harmful to BEA and to Butts, the sole member of BEA after Freedman departed. The case is now before the Court on the defendants’ Motion for Summary Judgment. In essence, the defendants argue that the plaintiffs have no reasonable expectation of proving any of their claims. See Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711 (1991). After 2 review of a voluminous summary judgment record, this Court concludes that there are genuine disputes of material fact that make summary judgment inappropriate. BACKGROUND Without detailing all the facts (both disputed and undisputed) in the parties’ submissions, this Court would highlight the following evidence which, if believed, could provide a basis for plaintiffs to recover on one or more of their claims.1 BEA was a closely held boutique investment banking firm that operated for many years with good success. Freedman focused on sales and business generation whereas Butts handled the legal and financial end of the business. In 2010, Freedman recruited Ben-Joseph to assist him on the sales end. Ben-Joseph joined the firm with the expectation of becoming a member. Although he never obtained an equity interest in BEA, he did receive an interest in receiving a percentage of the profits and was negotiating with Butts to become an equity member of BEA into 2012. Ben-Joseph worked closely with Freedman until his departure from BEA. Around this same time period (August 2011 into early 2012), Freedman and Ben-Joseph were engaged in secret discussions with a BEA competitor, WWC Securities, LLC (WWC) to merge the two companies. Freedman and Ben-Joseph did not inform Butts about these negotiations. These discussions were extensive and are supported in the summary judgment record by defendants’ own interrogatory answers as well as numerous emails and […]

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Posted by Massachusetts Legal Resources - November 3, 2017 at 9:46 pm

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