Posts tagged "Abrano"

Abrano, et al. v. Abrano, et al. (Lawyers Weekly No. 02-029-17)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2014-3509
BRYAN ABRANO, BRIDGET RODRIGUE, and DENNON RODRIGUE
Plaintiffs
vs.
FRANK ABRANO, KIM ABRANO, EDWARD HOLZEK and GARY TRAINOR
Defendants
CONSOLIDATED WITH SUCV2015-1339
LYMOL MEDICAL CORPRATION,
Plaintiff,
vs.
BRYAN ABRANO, BRIDGET RODRIGUE and DENNON RODRIGUE,
Defendants
CONSOLIDATED WITH SUCV2015-1367
BRYAN ABRANO, and BRIDGET RODRIGUE ,
on behalf of LYMOL MEDICAL CORPORATION,
Plaintiffs and Counterclaim-Defendants
vs.
FRANK ABRANO, KIM ABRANO, EDWARD HOLZEK,
GARY TRAINOR, and LYMOLD MEDICAL CORPORATION,
Defendants and Counterclaim-Plaintiffs
MEMORANDUM OF DECISION AND ORDER
ON PLAINTIFF-IN-COUNTERCLAIM FRANK ABRANO’S
MOTION FOR SUMMARY JUDGMENT
These three consolidated cases arise out of disputes among members and former members of a closely held corporation. Four of the parties are also members of the same family.
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With trial of this matter only weeks away, Frank Abrano (Frank) asks this Court to enter summary judgment in his favor on his counterclaim against Frank’s son Bryan Abrano (Bryan) and Frank’s daughter Bridget Rodrigue, both of whom executed a promissory note agreeing to pay $ 4,410,500 to Frank over a period of five years. The note was executed in connection with Frank’s agreement to sell a portion of his shares in Bryan Corporation, the family business, to Frank and Bridget. This Court concludes that there are clear disputes of fact that make summary judgment in this matter wholly inappropriate.
In opposing the motion, Frank and Bridget point to the following evidence in the summary judgment record. In the spring of 2013 when the last installment was scheduled to be made on the note, Bryan emailed Michael Hall, Bryan Corporation’s accountant, to confirm the amount of the final payment. Bryan then made the payment in line with Hall’s calculations. Around that same time, he had conversations with Frank that appeared to confirm that nothing further was owed to Frank on the note. Thereafter, Frank filed tax returns reflecting that he had received full payment for his shares and had been paid all interest due under the note. And in an Answer filed in this litigation, Frank stated that he had received from Bridget and Bryan “final payment” for his shares in Bryan Corporation in 2013. Finally, Bryan and Bridget have retained an expert who is prepared to testify at trial that, based on his review of a history of all payments received by Frank, Bridget and Bryan have actually paid Frank more than he was due. This Court finds it astonishing that, in the face of this evidence, Frank contends that there are no material disputes of fact, particularly since as a plaintiff on the counterclaim, he bears the burden of proof at trial.
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For these reasons and for other reasons articulated in the memoranda filed in opposition, Frank Abrano’s Motion for Summary Judgment as to his Counterclaim is DENIED.
______________________________________
Janet L. Sanders
‘ Justice of the Superior Court
Dated: October 2, 2017 read more

Posted by Stephen Sandberg - November 3, 2017 at 3:53 am

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Abrano, et al. v. Abrano, et al. (Lawyers Weekly No. 12-104-17)

COMMONWEALTH OF MASSACHUSETTS

SUFFOLK, ss.                                                                                   SUPERIOR COURT

                                                                                                             SUCV2014-3509

            BRYAN ABRANO, BRIDGET RODRIGUE, and DENNON RODRIGUE

Plaintiffs

vs.

FRANK ABRANO, KIM ABRANO, EDWARD HOLZEK and GARY TRAINOR

Defendants

 

CONSOLIDATED WITH                                                                SUCV2015-1339

 

LYMOL MEDICAL CORPRATION,

Plaintiff,

 

vs.

 

BRYAN ABRANO, BRIDGET RODRIGUE and DENNON RODRIGUE,

Defendants

 

 

CONSOLIDATED WITH                                                               SUCV2015-1367        read more

Posted by Stephen Sandberg - August 4, 2017 at 4:11 pm

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Abrano, et al. v. Abrano, et al. (Lawyers Weekly No. 12-163-16)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2015-1367-BLS2
BRYAN ABRANO and BRIDGET RODRIGUE,
derivatively and on behalf of BRYAN CORPORATION
Plaintiffs
vs.
FRANK ABRANO, KIM ABRANO, EDWARD HOLZEK and GARY TRAINOR
Defendants
vs.
BRYAN CORPORATION,
Nominal Defendant
MEMORANDUM OF DECISION AND ORDER
ON BRYAN CORPORATION’S MOTION TO DISMISS
PRUSUANT TO G.L.c 156D §7.44
This is one of three lawsuits involving members of a closely held corporation, the Bryan Corporation (the Company). The instant case is a derivative action brought on behalf of the Company by two minority shareholders, Bryan Abrano (Bryan) and his sister Bridget Rodrigue (Bridget). The Company now moves to dismiss the action on the grounds that a committee of two independent directors has determined, in “good faith” and after “reasonable inquiry,” that pursuing the action would not be in the “best interest” of the corporation. G.L.c. 156D §7.44 (a). After careful review of the parties’ submissions, this Court concludes that the Motion must be DENIED.
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BACKGROUND
The Company is a distributor of pharmaceuticals and medical devices. The defendant Frank Abrano (Frank) is its founder. In 2007, criminal charges were filed against him and the Company that resulted in his conviction and incarceration. Civil proceedings against him and the Company were resolved by way of a settlement agreement with the Food and Drug Admin-istration (FDA). As part of the settlement, Frank agreed not to have any affiliation with the Company or exercise any control over it. To satisfy that condition, Frank transferred his interest in the Company to his two children Bryan and Bridget and his estranged wife Kim, who holds a controlling interest. The Verified Complaint alleges that Frank, in violation of that agreement and with the assistance of Kim, has continued to meddle in the Company’s operations and has enriched himself at the Company’s expense.
In support of its motion to dismiss, the Company has submitted three affidavits together with attachments. That material, together with certain other material attached to plaintiffs’ Oppo-sition, reveals the following.
Before filing the derivative action, the plaintiffs made a Demand on the Company’s Board of Directors, as required by G.L.c. 156D §7.42. The date of the Demand was July 21, 2014. Pursuant to a resolution dated September 6, 2014, the Company’s Board of Directors ap-pointed a committee consisting of two directors, Edward A. Hlozek and Gary E. Trainor, to in-vestigate the Demand’s allegations. In addition to being named defendants in this action, Hlozek and Trainor are also personal friends of Frank. Both were nominated to the Board by Kim and elected immediately after the ouster of the plaintiffs and just one week before the De-mand was made. Before joining the Board, Hlozek was the CEO of QuantumCor, Inc., which owed Frank some undisclosed amount of money. Trainor owns a jewelry business in Nantucket.
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On August 28, 2014, Jennifer Chiunas, an attorney at Goodwin, Procter &Hoar (GPH) notified plaintiff’s counsel that GPH had been retained by the Company’s Board of Directors to conduct the investigation. The letter made no mention of a special committee; indeed, the letter was sent more than a week before the Company’s resolution purporting to appoint that commit-tee. It is not clear from the submissions before the Court how it came about that GPH was hired to conduct the investigation, much less that this was done at the behest of Hlozek and/or Trainor. The choice was a strange one in any event: Chiunas had represented Frank personally in the pro-ceedings brought by the United States Attorney’s Office and the FDA that ultimately resulted in the settlement agreement referenced in the Verified Complaint.
In a letter dated October 20, 2014, Chiunas informed plaintiff’s counsel that the “Board has determined that it is not in the best interests of the Company” for the shareholders to pursue the claims outlined in the Demand. The bulk of the letter dealt with the direct claims made by the plaintiffs that are the subject of a separate lawsuit. As to the derivative claims, Chiunas stated that an internal review revealed that Frank had been “uninvolved” in the Company since 2008, but that “there have been certain isolated instances of administrative oversight. ” She did not specify what those were but stated that “remedial measures” had been undertaken. In summarizing the steps that were taken to conduct this review, the letter listed certain financial records of the Company that were collected and analyzed. There is no indication that GPH inter-viewed either plaintiff or Frank Abrano.
DISCUSSION
Section 7.44(a) of Chapter 156D provides that a court shall dismiss a derivative action after demand is made on the corporation’s board of directors if two or more independent direc-tors determined that “the maintenance of the derivative proceeding is not in the best interest of
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the corporation.” In order to make the showing required for dismissal, the corporation must submit a “written filing” setting forth facts demonstrating that the directors were in fact inde-pendent and that they made their determination “in good faith after conducting a reasonable in-quiry.” G.L.c. 156D §7.44(d). In opposing the motion, plaintiffs assert that the Company has not met the requisite showing, particularly since the law firm that conducted the investigation represented Frank Abrano in the proceedings that resulted in the civil agreement banning him from the Company. In the alternative, plaintiffs ask that they be permitted to conduct discovery as to the nature and scope of the special committee’s investigation. This Court concludes that the Company has not made the showing required by Section 7.44(d).
The plaintiffs’ Opposition sets forth the various deficiencies in the Company’s submis-sions. Although Hlozek and Trainor were appointed to investigate the allegations of the Demand, their affidavits are decidedly vague as to what they themselves did. Indeed, it is not at all clear that they had any role in choosing GPH to conduct the investigation; when Chiunas informed in-formed plaintiff’s counsel in an August 28 2014 letter that GPH was retained by the Company to look into the allegations of the Demand, the special committee had not even been appointed. Moreover, the selection of GPH is enough, standing alone, for this Court to question the deter-mination that was ultimately made: Chiunas was Frank’s personal attorney in the federal pro-ceedings which resulted in the settlement agreement that banned him from being involved in the Company. Among other things, the Demand alleged that Frank had not complied with that agreement, thus putting Chiunas in the position of investigate her own client. In response, the Company does not really dispute the existence of this conflict but argues instead that there has been some kind of waiver in light of the fact that plaintiff’s counsel did not raise this as a prob-
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lem until the lawsuit was actually filed. But it is the Company’s burden to demonstrate that a rea-sonable inquiry into the allegations was conducted; a failure to object pre-litigation, when coun-sel often are in discussions aimed at avoiding a lawsuit, does not in any way diminish the show-ing that must be made to warrant dismissal.
This Court also shares plaintiffs’ concerns as to the scope of the investigation that was conducted and the extent to which Hlozek and Trainor are truly independent. The October 2014 letter responding to the Demand listed a series of documents that were analyzed as part of the in-vestigation. GPH did not interview the plaintiffs, Bridget’s husband Dennon (who also worked for the Company during the relevant time period) or Frank. GPH also did not undertake a review of Frank’s email account, telephone records, or bank records – materials which seem to be di-rectly relevant to the issues raised by the Demand. As to Hlozek and Trainor, they were nomi-nated to the Board of Directors by Kim Abrano following the plaintiffs’ ouster from their Com-pany positions. According the Verified Complaint, Kim at Frank’s direction had the two men placed on the Board simply to “rubberstamp” decisions made by Frank. Although this may not be true, the fact remains that both men are personal friends of Frank, and the Company where Hlozek served as CEO owes Frank some amount of money. Given that Frank was the primary target of the Demand’s allegations, there is some basis to question their ability to independently assess the validity of those allegations.
The Company argues in the alternative that certain allegations in the Verified Complaint were not specifically raised by the Demand and therefore are procedurally improper. The Demand alleged, however, that Frank was meddling in Company operations in a way that put the Com-pany at risk of violating the settlement agreement with the federal government and for his
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own personal benefit. This is broad enough to encompass the more specific allegations that the Company seeks to strike from the case. This Court is also keenly aware of the age of this case and its companion cases. It is time to move beyond preliminary procedural skirmishes and on to the merits.
____________________________________
Janet L. Sanders
Justice of the Superior Court
Dated: November 30, 2016 read more

Posted by Stephen Sandberg - December 7, 2016 at 11:07 pm

Categories: News   Tags: , , ,

Bryan Corporation v. Abrano (Lawyers Weekly No. 10-080-16)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

SJC-12003

BRYAN CORPORATION  vs.  BRYAN ABRANO.

Suffolk.     March 8, 2016. – June 14, 2016.

Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ.

Attorney at Law, Disqualification, Conflict of interest.

Civil actions commenced in the Superior Court Department on November 7, 2014, and March 13, 2015.

After transfer to the business litigation session and consolidation, a motion to disqualify counsel was heard by Janet L. Sanders, J.

The Supreme Judicial Court granted an application for direct appellate review. read more

Posted by Stephen Sandberg - June 14, 2016 at 2:36 pm

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