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Doug's Case

Doug enlisted in the Air Force in 1967 and was trained in electronics and communications. After returning from service in Vietnam, he got a degree in electronics engineering and developed an expertise in telecommunications. In the late '70's, he and Mark, a business colleague, became involved in a series of startup companies doing fiber optic cable work.

In late 2005, Doug found work as a consultant for 21st Century, a television cable provider. He then consulted Mark about creating their own company to furnish technicians to serve 21st Century's customers. Soon, Mark and Dougs formed MRM, a staffing firm in which each was to be a 50% shareholder. Mark would handle the financial and business relations, keeping books and records and developing customers. Doug would be responsible for technical matters and would supervise employees.

In January, 2006, Doug suffered a massive heart attack, but continued to discharge his responsibilities as he recovered.. By May, 2006, technicians were coming on board and MRM was receiving income from the new business. In 2007, business was looking good and both Doug and Mark finally looked forward to drawing nice salaries for the indefinite future.

From time-to-time, there were tensions between Doug and Mark. Doug was particularly concerned that Mark's management style created problems for their employees. He also worried that Mark was not sending out invoices on time, causing a cash crunch at MRM. For his part, Doug just seemed to be getting on Mark's nerves.

During the Spring of 2008, unbeknownst to Doug, Mark took a series of steps designed to push Doug out of the business and keep the 21st Century account for himself. Over the course of the next few months, Mark wined and dined senior 21st Century personnel. He intimated that Doug was unstable and was creating problems for 21st Century. He transfered MRM funds electronically to his own, personal accounts and even began interviewing candidates to take Doug's place in the organization. He also falsely suggested to 21st Century personnel that Doug was an employee who might have to take a leave of absence or be terminated.

Although Doug was aware of tensions, he did not have a clue that Mark was plotting his ouster behind the scenes. In late May, however, he received a copy of an email suggesting that MRM was "re-organizing." What he did not know was that Mark had already formed a new company to take over all the business from 21st Century. Then, in early June, prior to a routinely scheduled meeting at 21st Century, Mark presented Doug with an ultimatum: take a leave of absence or be ousted from the organization.

Overwhelmed by this ultimatum, Doug checked the company's bank accounts and learned that Mark had withdrawn more than $150,000 in recent weeks. He spoke with a 21st Century vice-president who, believing Doug had been fired, asked Doug to turn in his computer access card.

With nowhere else to turn, Doug searched the web and found out that Pinnola & Bomstein had a history of successfully litigating partnership and shareholder business disputes. He made an appointment right away and laid out his case step-by-step from the time he thought of the business until the time that his former friend shoved him out the door.

At the time, a substantial portion of the funds taken from the corporate accounts were still in Mark's personal accounts. In addition, 21st Century owed MRM almost $100,000 for work that Mark had belatedly invoiced. After hearing Doug's story, it became clear that they would need to seek an injunction to freeze those funds and they would need to move quickly.

Over the course of a few very intense days, Mike Bomstein reviewed the extensive material that his client had brought to him and crafted together a complaint in equity. Within a week's time, the parties were in court on Doug's motion for a preliminary injunction.

Counsel for Doug, Mark and 21st Century then conferred and reached a temporary agreement. The parties agreed that the Court should enter a decree placing more than $100,000 into an interest-bearing escrow account until the case was ready for trial.

On March 11, 2010 the case was called for trial. Over the course of the next eight months, both sides presented witnesses as well as documentary evidence. Following the close of the evidence, Mike submitted proposed findings of fact and conclusions of law.

On February 9, 2011, the Court rendered its verdict in favor of Doug and against Mark. 21st Century was directed to re-direct almost $40,000 to Doug on account of monies owed to Mark's new company. In addition, Mark was ordered to re-pay $375,000. Finally, because Mark was continuing to make $30,000 a month in profits from the very business that Doug co-founded, the Court ordered Mark to split the profits of the company so long as its business with 21st Century continued.

During the entire course of the lawsuit, Doug was unable to replace his income and his family experienced extreme financial duress. Because of the verdict that Mike obtained for him, he will once again be able to live a normal life and have substantial income for years to come.

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