Family disputes can turn nasty, as can business disputes, but there are few things worse than business disputes between family members.
Recently, Robert F. Tigani Jr. and his brother, Chris Tigani, filed a lawsuit against their father, Robert F. Tigani Sr., for allegedly abusing his position as trustee to divert funds and assets away from his children for his own benefit.
Tigani Sr. is a chairman of N.K.S. Distributors, a franchise of Anheuser-Busch for Delaware that was founded in 1960. The lawsuit alleges he took advantage of his position as chairman, and as trustee of an irrevocable trust that was created by his parents (who founded the company) to ensure the company remained in the family.
According to the complaint, when the trust was created in 1986, Tigani Sr. owned 42% of N.K.S. shares and 58% were set aside to benefit Robert Jr., Chris, and their children, with Tigani Sr. appointed trustee. But the lawsuit alleges Tigani Sr. abused his position to issue himself extra shares of the company, giving him a controlling interest in the distribution company. He allegedly concealed the improper issuance of these funds from his sons, and when they suspected him of misconduct, he allegedly refused to show them company records of the transactions.
Chris left the company almost ten years ago when he was according to the allegations arrested and imprisoned for tax evasion and improper use of campaign finances. But Robert Jr. was on the company’s board until the lawsuit was filed, at which point he was reportedly removed from the board and his pay was reduced to a quarter of what he had been receiving.
The brothers asked for the lawsuit to be expedited, for the judge to prohibit the company from entering into any new contracts until the lawsuit has been resolved, and to block any retribution against Robert Jr. Their attorney said Robert Sr. has no defense for his actions, and there’s no way of knowing what further damage he could be doing in secret.
The judge refused to grant both motions, saying the brothers had to show they would suffer immediate and irreparable harm if the motions were not granted, which the judge says they failed to do. He said he didn’t see how Robert Sr. could put any more pressure on Robert Jr. if his son had already been removed from the board and taken a significant pay cut, that contracts could be put aside and Robert Jr. could be eligible to receive back pay, depending on the results of the lawsuit.
The judge did ask the parties to set aside what are, no doubt, feelings of regret and betrayal in order to meet at some point in the next couple weeks to determine how company documents would be shared throughout the duration of the lawsuit.
An attorney representing Robert Sr. asked the judge if he expected any actual documents to be turned over in the next 14 days. The judge said his expectations were continually being lowered, but for them to do what they could.
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