Articles Posted in Business Disputes

Published on:

Super Lawyers named Illinois commercial law trial attorneys Peter Lubin and Vincent DiTommaso Super Lawyers in the Categories of Class Action, Business Litigation and Consumer Rights Litigation. DiTommaso-Lubin’s Illinois business trial lawyers have over a quarter of century of experience in litigating complex class action, copyright, non-compete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes.  Our Elmhurst and Naperville business dispute lawyers, civil litigation lawyers and copyright attorneys handle emergency business law suits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0000 or our toll free number (877) 990-4990.  You can also contact us online here.

Published on:

A recent shareholder suit challenging the sale of a Chicago-based company to IBM was dismissed by a Delaware chancery court because the merger was supported by an informed and uncoerced vote of 80% of stockholders. When IBM acquired healthcare software developer Merge Healthcare, Inc., in 2015 for $1 billion, a group of Merge stockholders brought a class action complaint against Merge for what they charged was an improper sale process. The plaintiffs alleged the directors breached their fiduciary duties of loyalty and care due to self-interest in the transaction. (In Re Merge Healthcare Inc. Stockholder Litigation, Consol. C.A. No. 11388-VCG, Del. Chancery Court, 2017.)

The class action sought damages resulting from IBM’s acquisition of Merge’s publicly owned shares, which was supported by nearly 80% of Merge stockholders. On August 6, 2015, Merge’s board entered into an agreement granting the company’s common stockholders $7.13 in cash for each of their shares, a 31.8% premium to the market price. Preferred stockholders received $1,500 cash per share. The merger was completed on October 13, 2015, at an approximate value of $1 billion.

As part of the merger, certain Merge managers, including one of the defendant board members, entered into employment or transition arrangements with IBM. Continue reading

Published on:

Most of us don’t think of A-list movie stars as having trouble paying for anything they want, but even when you’re making millions, it’s possible to spend more than you make. It can happen to the best, either through irresponsibility or mismanagement.

Because the extremely wealthy usually hire people to manage their money for them, everyone tends to start pointing fingers when things go wrong and it’s usually up to the courts to determine who was ultimately at fault.

According to The Management Group (TMG), Johnny Depp, the 53-year-old Oscar nominee and their former client, has been spending $2 million a month and allegedly still owes them $4.2 million for a loan they gave him. The unpaid loan allegedly forced them to start foreclosure proceedings on properties owned by the celebrity.

TMG claims it has been doing everything in its power to curb Depp’s outrageous spending habits for the better part of two decades. But the actor allegedly failed to respond appropriately, blamed his business managers, and continued to overspend. Continue reading

Published on:

Peter Doig isn’t exactly a common name, but the world-famous painter of that name had the bad fortune of bearing a similar name to that of Peter Edward Doige, who is apparently the true creator of a landscape painting at the center of a highly unusual lawsuit that was recently filed in the U.S. District Court of Northern Illinois.

Doige, not the painter Doig, served a short sentence in an Ontario correctional facility for LSD possession in the mid-1970s, which is where he met Robert Fletcher, who was allegedly serving as his parole officer. Fletcher said he watched Doige create a landscape painting that bears some strong resemblances to the paintings Doig is famous for and that regularly sell for $10 million or more. Fletcher said he bought the painting for $100 as a way to help Doige stay on the straight and narrow and helped him get a job.

The painting in question hung on a wall in Fletcher’s office for 40 years before a friend noticed it and told him it was by a famous painter: Peter Doig. Fletcher said he watched a talk Doig had given at a university and recognized his mannerisms as belonging to the man he helped all those years ago. Fletcher then got into contact with an art dealer in Chicago and they began making arrangements to sell the painting. Continue reading

Published on:

When billions of dollars are on the line, the end of a personal friendship can jeopardize business investments, as well as personal relationships, especially when one party’s mental competence is called into question. That’s exactly what happened when Sumner M. Redstone, the head of a media empire that includes Viacom and CBS, among others, disinherited his former lover and long-time friend, Manuela Herzer, and banished her from his multi-million-dollar mansion, which she was set to inherit before he kicked her out and changed his will.

Herzer filed a lawsuit claiming that, at 93 years old, Redstone’s mental capacity had deteriorated to the point where he was no longer fully aware of what he was doing and that he was improperly influenced by his daughter, Shari Redstone, with whom he had been estranged and just recently reconciled. Herzer’s complaint alleged Shari is influenced solely by her father’s wealth, while both Sumner and Shari accuse Herzer of being the gold digger.

After hearing testimony from Herzer and Shari, among others, including video testimony from Sumner, the California judge in charge of the case dismissed it. Herzer plans to appeal that decision, but even if she doesn’t succeed, her complaint has had consequences that have reached all over the country. The question of Redstone’s mental capacity has lead high-level executives in his companies to question whether he’s mentally capable of effectively running all the companies under his vast media empire. Continue reading

Published on:

The U.S. Court of Appeals for the Seventh Circuit recently held that client victims of a lawyer’s fraud take precedence over a commercial lender in being paid out of funds owed to the lawyer’s firm. Attorney William C. of Indiana-based Conour Law Firm, LLC is serving a 10-year prison term for stealing $4.5 million from clients’ trust funds. His victims obtained a judgment against him in 2014. Timothy D., an attorney at Conour, had previously left to join the Ladendorf Firm, bringing 21 Conour clients with him who eventually generated over $2 million in fees. William’s victims, as well as the Conour Firm’s lender, ACF 2000 Corp., claimed the right to a portion of those funds. Writing for the Seventh Circuit in ACF 2006 Corp v. Devereux, No. 15-3037 (7th Cir. 2016), Judge Easterbrook summed up the ensuing battle: “This appeal presents a three-corner fight about who gets how much of that money.”

At issue was how much of the $2 million belonged to the Conour Firm for the services it performed before Timothy D. left, and how those funds should be divided between the victims and ACF 2000. At trial, the federal district court concluded that the Conour Firm was entitled to some $775,000 under principles of quantum meruit, and that ACF had priority of payment over the victims. Continue reading

Published on:

A corporate defendant waives the right to enforce an arbitration clause in an employment agreement if it asserts an affirmative defense to a complaint that is unrelated to arbitration. So ruled the First District Appellate Court of Illinois in a recent breach of employment contract case called Koehler v. Packer Group Inc., 2016 IL App (1st) 142767.

Michael K. was CEO of Packer Engineering, a subsidiary of The Packer Group. When he reported evidence of alleged financial improprieties on the part of Packer’s chairman to the company’s board, he claims he was dismissed in retaliation. He filed suit against the company for breach of his employment contract, and also against various Packer officers individually for tortious interference with contract, claiming they induced the company to breach the contract. The defendants argued that, pursuant to the contract’s terms, Michael’s claims should have been resolved in arbitration.

Michael’s four-year employment agreement contained an arbitration clause waiving the right to resolve disputes in court. The contract was signed by Michael, Packer’s chairman, and several Packer executives. Michael claimed that after he refused to go along with the alleged financial improprieties, he was offered the option of demotion or termination and chose termination. In his complaint, he sought future salary and bonus compensation plus punitive damages. In its answer, Packer asserted the affirmative defense of Michael’s own breach of the employment agreement, then later moved to dismiss the complaint on the grounds that the arbitration provision deprived the court of jurisdiction. The individual defendants argued that the arbitration clause also applied to Michael’s suit against them for tortious interference, claiming they had signed the agreement in their corporate and not individual capacities. The circuit court ruled that Packer waived its contractual right to arbitrate when it answered Michael’s complaint without asserting the right.   Continue reading

Published on:

A Cook County judge on June 3 in the case of Robert Buono v. Intelligentsia Coffee, Inc., Emily Mange, and Doug Zell gave the green light for this lawsuit to proceed against the founders of Chicago-based Intelligentsia Coffee, Inc. for allegedly withholding more than $15 million in profits from the company’s former CEO. Last November, plaintiff Robert Buono sued Intelligentsia and two company co-founders, Emily Mange and Doug Zell, for breach of contract and violation of Illinois’ Wage Payment and Collection Act (IWPCA). Buono, former counsel for the coffee retailer and supplier, was hired in 2011 as co-chief executive and president under an employment contract that set out compensation of salary, annual bonus, and a share of future profits that was to gradually rise to 15 percent.

In his complaint, Buono claimed his management decisions helped grow the company into a successful chain by the time Peet’s Coffee & Tea purchased a majority stake in Intelligentsia for a reported $100 million in late 2015. During his tenure, Intelligentsia’s profits rose 61 percent. Mange and Zell dismissed Buono in 2014. In count I of his complaint for violation of IWPCA, he claims he is owed profits from 2012 until the date of his termination, which should have been paid at the time of his departure. In count II for breach of contract, he claims he is owed $15 million, which should have been his share of the Peet’s sale. Buono argued in his suit that he accepted a below-market salary in exchange for the cut of future profits, without which he would not have agreed to take the position. Continue reading

Published on:

An employment agreement that sets out a specific term of employment may not protect an employee from being terminated at any time. The Fifth District Appellate Court in Wessel v. Greer Management Services, Inc., 2016 IL App (5th) 150259-U recently ruled against a plaintiff who brought a breach of contract action against her former employer, holding that the language in the agreement she signed provided for at-will employment despite the inclusion of fixed employment dates.

Christina W. was hired as a compliance manager by Greer Management Services. She and a Greer representative signed an untitled document labeled an “employment summary,” which stated that Christina would serve in the position “for the period of January 1, 2012 to December 31, 2014,” and described the compensation package. However, the final paragraph read: “Greer Management Services reserves the right to change the above provisions at any time. The provisions of the policy manual govern the rights and obligations of the employee. The employee acknowledges that she is an employee at will.” After Greer terminated Christina’s employment in September 2013, midway through the term specified in the signed document, Christina filed a complaint against the company claiming that the document was a contract for employment which was breached by Greer.

The trial court dismissed the complaint, finding that Greer reserved the right to change the provisions of the agreement at any time, including by terminating Christina’s employment before the expiration of the term, and that the “employment summary” was not sufficient to overcome the presumption of employment at-will. Christina then filed an amended complaint again alleging breach of contract and also breach of the implied covenant of good faith and fair dealing, for “terminating her employment without notice, warning, or explanation, contrary to her expectations.” The court against dismissed her complaint, on the grounds there was no valid and enforceable contract for employment and therefore could be no breach. Continue reading

Published on:

It’s generally a good idea to avoid saying any negative things about the company/people you work for, but what if you work for the government? The First Amendment of the U.S. Constitution was designed to promote the open and free discussion of politics and public figures, and that includes public workers who are employed by the government. This means employers are not allowed to retaliate against workers who express a political opinion.

This issue was recently brought before the U.S. Supreme Court over an allegedly illegal demotion. As it turns out, it was all a big misunderstanding, but the mistake had a very real effect for Jeffrey J. Heffernan, who worked as a police detective in Paterson, NJ. Heffernan’s bedridden mother had asked him to pick up a sign for Lawrence Spagnola, a candidate for mayor. Heffernan said he had not taken any position with regard to the candidate, but when he was carrying the sign for his mother, it looked as though Heffernan was making a political statement and endorsing Spagnola. As a direct result of his supervisor’s understanding of the situation, Heffernan was demoted to patrol officer. Continue reading