In re Centennial Technologies Litigation
| Decision Date | 14 May 1999 |
| Docket Number | No. Civ.A. 97-10304 REK.,Civ.A. 97-10304 REK. |
| Parties | In re CENTENNIAL TECHNOLOGIES LITIGATION. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Glen DeValerio, Norman Berman, Berman, DeValerio & Pease, Boston, MA, David Bershad, Milberg, Weiss, Bershad, Hynes & Lerach, New York City, Jack G. Fruchter, Fruchter & Twersky, New York City, Stanley Bernstein, Bernstein Liebhard & Lifshitz, LLP, New York City, USA, Nancy F. Gans, Moulton & Gans, LLP, Boston, MA, Stephen Moulton, Moulton & Gans, Boston, MA, for Ronald Schwartz, plaintiff.
David Bershad, Milberg, Weiss, Bershad, Hynes & Lerach, New York City, Jack G. Fruchter, Fruchter & Twersky, New York City, Stanley Bernstein, Bernstein Liebhard & Lifshitz, LLP, New York City, USA, Nancy F. Gans, Moulton & Gans, LLP, Boston, MA, Stephen Moulton, Moulton & Gans, Boston, MA, for David Finkelstein, plaintiff.
Jeffrey C. Block, Berman, DeValerio & Pease, Boston, MA, for Sal Latorraca, Robert Blashka, Dr., Stephen Campbell, Barbara Ann Korns, Ronald Rees, Arnold Korelitz, Myer Shapiro, Karl Bauknight, Sherril Eapen, Sheeba Cherian, Leon Troll, Robert Weiss, Michael Sorkin, David E. Hill, consolidated plaintiffs.
Glen DeValerio, DeValerio & Pease, Boston, MA, for Devereux Green Hill, Robert J. Suarez, Irving Gurak, Anthony Kalioros, Leon North, David Waikus, Stephan Eggly, Gordon Sokich, Rosen & Yampolsky Partnership, Jonathan Boms, Harry Curry, Robert Robinson, Albert Shapiro, Stanton L. Triester, Carl Chaikin, Carl Chaikin IRA, Susan Chaikin, Cliff Associates, Pat V. Caputi, Freeman Family Partnership, MBR Produce Corp. Retirement Plan, Douglas Freeman, Trustee, Eugene Shapiro, WHU Enterprises, Inc., Marsha J. Taylor, James Aboud, Robert H. Wittemeyer, consolidated plaintiffs.
Norman Berman, DeValerio & Pease, Boston, MA, for Barbara Strunk, Richard Strunk, Manuel de Almeida, Ines de Almeida, consolidated plaintiffs.
Glen DeValerio, Jeffrey C. Block, DeValerio & Pease, Boston, MA, for Steven S. Siegelaub, consolidated plaintiff.
Glen DeValerio, Jeffrey C Block, Matthew Miller, Berman, DeValerio & Pease, Boston, MA for Charles Philips, derivatively on behalf of Centennial Technologies, Inc., consolidated plaintiff.
Thomas G. Shapiro, Edward F. Haber, Shapiro, Grace & Haber, Boston, MA, for John M. Babington, Howard P. Schwartz, Miriam Thurm, Felix Smolensky, Yaakov Glatter, Max Bruysschaard, Jennifer L. Ellis, consolidated plaintiffs.
Thomas G. Shapiro, Edward F. Haber, Michelle H. Blauner, Shapiro, Grace & Haber, Boston, MA, for Edward Campanelli, Christine Campanelli, Robert Bernard, consolidated plaintiffs.
Edward F. Haber, Shapiro, Grace & Haber, Boston, MA, for Morris Weinstein, Moshe Ariel, consolidated plaintiffs.
Thomas G. Shapiro, Michelle H. Blauner, Shapiro, Grace & Haber, Boston, MA, for Jessie B. Carnevale, Stanley Egelberg, consolidated plaintiffs.
Ralph M. Stone, Milberg, Weiss, Bershad, Specthrie & Lerach, New York City, Howard D. Finkelstein, Finkelstein & Associates, San Diego, CA, Stephen Moulton, Moulton & Gans, Boston, MA, for William Karges, Jr., Steven Goldman, Randi Warren, M.D., consolidated plaintiffs.
Gretchen M. Van Ness, Boston, MA, Robert C. Schubert, Schubert & Reed LLP, San Francisco, CA, for Lori L. Sanders, consolidated plaintiff.
Gretchen M. Van Ness, Boston, MA, for Earl L. Mitchell, consolidated plaintiff.
Peter A. Lagorio, Gilman & Pastor, Boston, MA, Saul Roffe, Sirota & Sirota, New York City, for JCT Design Enterprises, Inc., consolidated plaintiff.
Murray Miller, Miller & Miller Ltd., Phoenix, AZ, for Kantial R. Patel, Ranjan K. Patel, consolidated plaintiffs.
Marc Redlich, Law Offices of Marc Redlich, Boston, MA, for Anatole Geiche, consolidated plaintiff.
Samuel Kornhauser, Law Offices of Samuel Kornhauser, San Francisco, CA, for Marty Burstein, Robert Boorstein, Dr., Richard Baum, Urmila Bhargava, Stanley H. Bigelow, Robert Boone, Shirley L. Boone, Jeffrey Bruno, Robert Burke, John Cassetti, Ralph Clock, Rachanee Clovis, Elliot Cohen, Dr., Muriel Cohen, Thomas Conrad, Dr., Phillip Crary, John Downward, William Dukes, Ronald Falk, Glenn Falkowski, Hermann Fasel, Charles Ferris, Joan Firestone, Leslie Gelman, Gene Griffin, Deborah Gruen, Janet Gustafson, Tom Herson, Mitchell Hirsch, Lorri Hirsch, Ken Kamins, Karin Kerns, David M. Kerr, David Komet, Jim Korth, Prem Kumar, Clark Lagow, John Landis, Larry L. Likover, Dr., John G. Lowe, Dawn Luber, David Mann, Emerson Marsh, Laveta Marsh Revocable Trust, Don L. McGinnis, Edward Meece, James Meeker, Steve Molis, Patricia Newcombe, Robert Newcombe, Rakesh Parikh, Patrick Peavy, Dr., Pentz Revocable Living Trust, Michael Radigan, Ronald A. Remick, Joseph E. Rizk, Paul E. Romano, Judith A. Romano, William Ryan, Glenn Scott, Craig Seger, Melvin Selznick, Curt Shuey, Charles Smith, Geoffrey Smith, Townsville Trading, Ltd., Prasad Srinivasan, Douglas W. Stone, Mark Susnow, Bill Tifft, Henry W. Tooke, Paul Vignale, Victor Vizitei, Jim Wahl, William J. Walton, Jean Williams, Gordon Wong, consolidated plaintiffs.
John F. Cullen, Cullen & Resnick, Boston, MA, for James M. Murphy, Jr., defendant.
Dennis M. Kelleher, Thomas J. Dougherty, Skadden, Arps, Slate, Meagher & Flom, Boston, MA, for Coopers & Lybrand, Coopers & Lybrand L.L.P., defendant.
Peter M. Saparoff, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., Boston, MA, for Needham & Co., Inc., defendant.
Robert J. Muldoon, Jr., Sherin & Lodgen, Boston, MA, Christopher A. Duggan, Christopher A. Duggan, Smith, Duggan & Johnson, Boston, MA, James M. Wodarski, Sherin and Lodgen LLP, Boston, MA, Thomas G. McNeil, Lawrence G. Campbell, Dickinson, Wright, Moon, Van, Dusen & Freeman, Detroit, MI, David A. Brown, Sherin & Lodgen LLP, Boston, MA, Matthew J. Walko, Milton, MA, for Lawrence J. Ramaekers, defendant.
Robert J. Muldoon, Jr., James M. Wodarski, David A. Brown, Sherin and Lodgen LLP, Boston, MA, for Jay Alix and Associates, consolidated defendant.
Michael A. Collora, David M. Osburne, Dwyer & Collora, Boston, MA, for Thomas Kinch, defendant.
Stephen F. Murray, Spencer Kagan, Kagan & Kagan, P.C., Revere, MA, for Bond D. Fletcher, Mediajet, Inc., Suncrest Ltd, consolidated defendants.
John D. Donovan, Jr., Mark P. Spzak, Crystal D. Talley, Ropes & Gray, Boston, MA, for Lehman Brothers, Inc., consolidated defendant.
Albert F. Cullen, Jr., Boston, MA, for Presage Corp./BBC Computers, consolidated defendant.
MEMORANDUM IN EXPLANATION AND PRACTICE AND PROCEDURE ORDER NO. 15
Next Scheduled Case Management Conference:
June 9, 1999, at 4:00 p.m.
Practice and Procedure Order No. 15 supplements Practice and Procedure Orders 3, 8, 9, 10, 12, 13, and 14 and modifies them only to the extent stated below. Memorandum in Explanation of Practice and Procedure Order No. 15
Pending for decision (among other motions that I am not prepared to decide at this point) are:
(1) Defendant Jay Alix and Associates' Motion for Summary Judgment with Respect to Plaintiffs' Respondeat Superior and Section 20(a) Claims (Docket No. 276, filed March 29, 1999), with Memorandum in Support (Docket No. 277). Plaintiffs filed a Memorandum in Opposition (Docket No. 293, filed April 22, 1999).
(2) Motion for Leave to File Reply Memorandum in Support of Jay Alix and Associates' Motion for Summary Judgment (Docket No. 294, filed May 3, 1999), with Reply Memorandum in Support of its Motion for Summary Judgment (Docket No. 295). The Motion to File a Reply Memorandum is ALLOWED.
Defendant, Jay Alix & Associates ("JA & A"), specializes in providing management and financial services to troubled companies. The highest ranking title within JA & A is "principal" (except that one of the principals is the "managing principal"). As of February, 1999, roughly twenty employees had the title of "principal," one of whom was defendant, Lawrence J. Ramaekers ("Ramaekers").
JA & A entered into a contract (the "Agreement") with defendant, Centennial Technologies ("Centennial"), in early 1997. Under this agreement, Ramaekers was to serve as the interim Chief Executive Officer ("CEO") of Centennial, which was experiencing financial difficulties. For the services of Ramaekers and other JA & A employees, JA & A was to receive an hourly fee, reimbursement of expenses, and an equity stake in Centennial. The Agreement contemplated an "independent contractor relationship" and specified that JA & A employees were not entitled to any of the benefits of Centennial employees. Docket No. 293, Ex. 1.
While serving as interim CEO of Centennial, Ramaekers conducted interviews with journalists concerning Centennial's prospects. Plaintiffs assert that Ramaekers made statements in these interviews that were in violation of Section 10(b) of the Securities Exchange Act ("the Exchange Act") and corresponding Rule 10(b)(5). Plaintiffs assert that JA & A is liable for these statements both under agency principles and also under Section 20(a) of the Exchange Act because it is a "control person" of Ramaekers.
In order to be entitled to summary judgment, in circumstances like those associated with the Motion of Jay Alix & Associates, now pending before the court, the movant must make a preliminary showing of the absence of any genuine dispute of material fact and that it is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). If the movant satisfies this burden, then the nonmovant, must "demonstrate, through specific facts, that a trialworthy issue remains." Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir.1997).
Issues of fact are in "genuine" dispute if they "may reasonably be resolved in favor of either party." Id. Facts are "material" if they possess "the capacity to sway the outcome of the litigation under the applicable law." Id. The facts in genuine dispute must be significantly probative in order for summary judgment to be denied; "conclusory allegations, improbable inferences,...
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