Posts tagged "Donavan"

Brining v. Donavan (Lawyers Weekly No. 09-002-17)

1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION NO. 16-3422-BLS1 JENNIFER BRINING, individually and as Trustee of the Jennifer Brining Living Trust and for the Benefit of SENDLATER, INC., in a Derivative Capacity vs. JOHN J. DONAVAN, SENDLATER, INC., SENDLATER II HOLDINGS, LLC AND SIL ENTERPRISES, LLC MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS’ MOTION TO DISMISS INTRODUCTION This case is before the Court on the nominal defendant Sendlater, Inc.’s (Sendlater) motion to dismiss. The exact nature of the motion to dismiss is complicated by the unusual procedural history of this case which informs the basis for the motion that Sendlater has filed. The plaintiff, Jennifer Brining, is a shareholder in Sendlater, a corporation established under the laws of Vermont in 2014. Although she is by far the largest investor in Sendlater, having invested approximately $ 1.3 million of the approximately $ 2.5 million invested in the company, she is a minority shareholder owning only just over 11% of the company, as of May, 2017.1 She originally filed her complaint asserting only direct claims against the defendants who are John J. Donovan and two companies that he or his wife control (collectively, for simplicity, 1 The court has not been provided with a capitalization chart. While the company’s value, if any, may have deteriorated since Brining made her investment, the court has seen no evidence that any valuation of the company was ever undertaken, although the value assigned a share varied dramatically over the past three years. 2 Donovan). In general, Brining alleged that nearly all of the money invested in Sendlater was taken by Donovan, then a Director and effectively the manager of Sendlater, and used for his personal affairs, not for the benefit of Sendlater. She asserted various causes of action based on that conduct. At a hearing on requests for preliminary relief convened in November, 2016, the court (Liebensparger, J.) commented that the claims asserted by Brining appeared to be claims for corporate waste, which were claims that belonged to Sendlater and not to an individual investor. Apparently prompted by this remark, on November 30, 2016, Brining’s attorney sent counsel for Sendlater a Mass.R.Civ.P. 23.1 demand letter demanding that Sendlater’s board of directors (the Board) cause the company to bring suit against Donovan. On December 13, 2016, Brining amended her complaint to allege that a demand had been sent, but the Board had not responded.2 During additional hearings held in early 2017 to address discovery disputes and requests for protective orders, the court ruled that while the form of the demand sent to the Board was unusual, it was adequate to inform the Board of the allegedly wrongful actions undertaken by Donovan and to request […]

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Posted by Massachusetts Legal Resources - September 29, 2017 at 6:42 am

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