Industry: Healthcare

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Waterkeepers

Question everything and wreak chaos on your opponent.

A minority owner of a closely held skin care line was slowly forced out of the company he put on the map. After their heavily discounted buyout offer was refused, the majority members of the company caused the entity to file suit against the minority member for purported misappropriation of trade secrets in a clear attempt to pressure the minority member into accepting the discounted offer. Enter MM&H. After preparing a comprehensive litigation strategy, MM&H began executing a strategy of aggression designed to flip the narrative and have the majority members begging for a resolution. First, MM&H challenged the majority member’s authority to file suit on behalf of the company without complying with the governing corporate documents. Second, MM&H sought disgorgement of any fees paid by the company to its counsel because the claim was an unauthorized corporate act. Third, MM&H challenged the existence of any “trade secret” and propounded the company with comprehensive discovery designed to challenge that classification. Fourth, MM&H began exercising its rights as a minority member outside the litigation by seeking inspection of corporate records under Florida law and the applicable operating agreement. Once the majority owners were already regretting their actions, MM&H then administered its coup de grâce: exercising the minority member’s right to advancement of its defense fees under the applicable operating agreement. The effect of this demand was the majority members would have to pay three sets of lawyers to continue their fight: (1) their lawyers; (2) the company’s lawyers; and (3) the minority member’s defense fees.

The case promptly settled.

The minority member received a substantially higher buyout for his interest in the company.