In a dispute over the finances of two closely held companies, Fox Rothschild litigator Jordan Kaplan won a decision in the New Jersey Superior Court’s Chancery Division that effectively exonerates three shareholders of claims that they breached their fiduciary duties to the companies and their shareholders.

In Copelow v. Yontef, a man accused his aunt of paying herself an inflated salary for managing three buildings in Bayonne, NJ that the companies own. He also alleged that she paid excessive fees to her husband to handle the company’s books and perform day-to-day accounting work for the companies.

Plaintiff's lawyers were seeking a buyout and damages from three shareholder. Based upon the value of the entities and other considerations, the plaintiff sought to recover in excess of $800,000.

But Judge Mary Costello concluded in a 27-page decision and order that the plaintiff fell far short of proving any of his claims for damages.

Judge Costello noted that the issue of the salary was put to all shareholders each year in the form of a ballot memo and that her nephew’s failure to return the ballot must be read as his acquiescence.

Judge Costello also found that the plaintiff’s expert witness was “not at all helpful to the court” in assessing the validity of the excessive salary claim. 

In his cross-examination, Kaplan had demonstrated that the expert failed to support his conclusions. Specifically, Kaplan showed that the expert never researched the Bayonne property management market and had ignored key facts that otherwise would have been critical to an appropriate expert analysis of the plaintiff’s claims.

As a result, Judge Costello concluded that the plaintiff failed to prove his claim of shareholder oppression and failed to show that his aunt should be removed as the companies’ manager.

As this article contains statements regarding past performance, please note that results may vary depending on your particular facts and legal circumstances.