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Albany Team's Significant Trial Win Saves Client Tens of Millions
People: Peter A. Lauricella, Christopher A. Priore, Daniel J. Lange and Kadeem Wolliaston
Semlies and Wolliaston Thwart Motion to Amend Complaint For Nursing/Rehab Center Client
People: Lori Rosen Semlies and Kadeem Wolliaston
Case Closed: How a Well-Drafted Release Shut Down a $1 Million Fraud Claim in Commercial Dispute
People: Peter A. Lauricella and Kadeem Wolliaston
Client Wins
Client Wins
Case Closed: How a Well-Drafted Release Shut Down a $1 Million Fraud Claim in Commercial Dispute
Peter Lauricella (Partner-Albany, NY) and Kadeem Wolliaston (Associate-Albany, NY) defended a complex commercial matter involving allegations of fraud, disputed ownership interests, and an attempted clawback of nearly $1 million in sale proceeds from a merger agreement. Our client, a private consulting and investment firm, was sued by two individuals who claimed they were each entitled to a 10% ownership interest in the subject company, which was later sold for $9.75 million. The parties had drafted and signed an “Agreement and Mutual Release,” which clearly and unambiguously released our client and its members from any and all claims, rights, causes of action, debts, shares, stock, interests, sums of money, and liabilities, whether known or unknown. Plaintiffs acknowledged they were represented by independent counsel and had entered into the agreement of their own free will. Six weeks after the release was executed and funds returned, our client sold the company to a third party for $9.75 million. The plaintiffs later obtained documentation indicating that negotiations for the sale may have begun prior to the execution of the release, and they filed suit against our client and its principals, seeking to set aside the release on the grounds of fraudulent inducement. In response, Peter and Kadeem moved to dismiss the complaint, arguing that the plaintiffs’ claims were barred by the plain language of the release and emphasized that the release explicitly covered all potential claims relating to stock, interests, and sums of money, including those that were unknown at the time. Importantly, under established law, a claim for fraudulent inducement cannot survive a broad release unless the plaintiff can allege that the release itself was induced by a separate fraud – something the plaintiffs failed to do. The court agreed and granted our motion to dismiss in full. The ruling reinforces the critical importance of well-drafted releases in commercial transactions and the strong protections they can offer against post-closing disputes.
Peter A. Lauricella and Kadeem Wolliaston
Semlies and Wolliaston Thwart Motion to Amend Complaint For Nursing/Rehab Center Client
In a New York State Supreme Court case in Schenectady County, attorneys Lori Semlies (Partner-White Plains, New York) and Kadeem Wolliaston (Associate-Albany) successfully opposed a motion to amend a complaint in a negligence lawsuit against a rehabilitation and nursing center. The plaintiff had initially filed against the center and several defendants listed by first names or as “John Does.” Despite requesting the center’s help to identify these individuals, the plaintiff was informed that no employees matched those names during the relevant period. The plaintiff later sought to amend the complaint to include the full names discovered from the center’s medical chart, which he had possessed since January 2023. The court denied the amendment, siding with our argument that the plaintiff’s delay in identifying the defendants caused prejudice, as the statute of limitations had expired.
Lori Rosen Semlies and Kadeem Wolliaston
Albany Team's Significant Trial Win Saves Client Tens of Millions
Following a nearly three-week trial, an Albany-based team comprising partners Peter Lauricella and Chris Priore and associates Daniel Lange and Kadeem Wolliaston obtained a favorable decision in New York State Supreme Court, Albany County for our client, an aggregate materials company that owns multiple quarry sites and asphalt plants, which also engages in road construction.
As background, two first cousins owned a minority shareholder position in each other's companies, but in the mid-1990s, they held different visions for their respective businesses, and tensions arose. In or around 2007, our client’s majority shareholder requested that his shares in his cousin’s business be purchased, and his cousin agreed to do so. In 2014, the cousin died and his son became executor, and demanded an inspection of our client’s records. In late 2015, the son filed a Shareholder's Derivative lawsuit against our client, our client’s majority shareholder and our client’s other directors and related companies alleging that our client was being "looted" in a "grand scheme of fraud" in excess of $3 million a year. In 2019, our client and the other defendants filed motions for summary judgment, and the court granted the motion in large part, dismissing every claim in the Complaint, except for one alleging that two employees had been overcompensated.
In January 2019, the cousin’s son filed another proceeding - a judicial dissolution proceeding pursuant to NY Business Corporation Law (BCL) section 1104-a, claiming that our client’s alleged "oppressive actions" against him warranted the dissolving of the entire company, in which the assets would be liquidated and the proceeds paid out to the shareholders. Under NY's BCL, our client opted to purchase the plaintiff’s shares, triggering a Valuation Proceeding, with experts on each side exchanging their reports. Our experts opined that the company was worth approximately $18 million, which valued the plaintiff’s share at nearly $6 million (after discounts) (although the realistic lowest value was probably closer to $8.5 million). The plaintiff’s valuation team set the worth at more than $58 million, resulting in a value for his shares of more than $22 million – $7 million more than our experts had valued the entire company!
In a classic “bet the company” case, the court heard more than 25 witnesses and considered some 200 exhibits in this lengthy trial. In the end, the court ruled that the value of the plaintiff’s shares was $10.5 million – far closer to our expert team's value, and a far cry the plaintiff’s $22 million. Ordinarily, New York courts award 9% interest, and judges rarely vary from that. Through some innovative arguments and evidence the Albany team introduced at trial, including how the plaintiff kept these proceedings going for almost eight years, the court awarded interest at only 4.75%, resulting in a savings of more than $2 million for our client!
Peter A. Lauricella, Christopher A. Priore, Daniel J. Lange and Kadeem Wolliaston
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