Firm Obtains Favorable Ruling in Hotly-Disputed Shareholder Dispute
David Chaffin, Managing Partner of the Firm’s Boston office, recently prevailed in the trial of a hotly-disputed shareholder dispute. In Finnegan, et al. v. Baker, et al., Civil Action No. 09-3772-BLS1, our clients - four shareholders of VBenx Corporation, which provides dedicated Internet portals to communicate and offer group voluntary benefits and financial services products to employees and organization members - were sued by two other shareholders in the Business Litigation Session of the Massachusetts Superior Court.
The plaintiffs, one of whom was VBenx’s then Chairman, alleged that our clients had improperly seized majority control of the corporation by converting certain promissory notes to shares. By agreement, the case was phased, with the initial phase limited to proceedings relating to the plaintiffs’ claims and all proceedings on our clients’ counterclaims stayed, pending resolution of the plaintiffs’ claims.
The plaintiffs’ claims were tried in mid-2011. While the claims were under advisement, one of the plaintiffs filed a duplicative action in the Delaware Court of Chancery. David secured an injunction stopping the Delaware action.
On October 18, 2012, Associate Justice Peter M. Lauriat issued 77 pages of findings and rulings, including an order for judgment, on the plaintiffs’ claims. He found and ruled in favor of our clients in all respects, rejecting all of the plaintiffs’ many claims, including a number under Delaware corporate law that the plaintiffs first raised on the very eve of trial. Justice Lauriat ordered judgment in favor of our clients on three of the counts of the operative complaint and dismissed the fourth as moot.
Proceedings on the counterclaims are underway.