7/15/2015

Lawyeraccusedofselfdealinginhandlingoffamilyassets|VirginiaLawyersWeekly

Lawyer accused of self-dealing in handling of family assets

By:PeterVieth July15,2015
Alongsimmeringbattleovermillionsinfamilyassetshasledtoa14count
lawsuitdemanding$48millionfromanAlexandrialawyer,hislawfirmand
threeotherpeople.
AttorneyBruceW.Henryisaccusedina90pagecomplaintoftaking
controlofvaluablecommercialrealestatewhichanAlexandriabusinessman
intendedtoconveytohischildren.
Hisaccuserisoneofthosechildren,JackieBogleMeuse,aRappahannock
Countybusinesswoman.
ThelawsuitisthelatestmanifestationofadisputethatnowdividesMeuseandhersister,bothdaughtersofJack
Bogle,whodiedin2012.
ThedetailsofthedisputearereminiscentofafightovercontrolofalucrativefamilyownedKyanitemining
enterpriseinBuckinghamCountythatsplitanotherfamilyandspurredclosercourtscrutinyofallegedcorporate
oppressioninVirginia.
TheBogleconflicthasitsseedsinasonwhoevaporatedthefamilyfortuneinthe1980s.
BobBoglepersuadedhisfather,headofaprofitablerailroadmaintenancecompany,tosellthatbusinessand
investincommercialrealestate.Whentherealestatedealswentsour,Bobstolemoneyfromthemaintenance
companypensionfund.
Bobwasconvictedofembezzling$758,000fromthepensionfundandsentencedtonearlysixyearsinprisonin
1995.
Bobstheftforcedhisfather,Jack,intobankruptcy.Tosatisfycreditorsandstillprovideaninheritanceforhistwo
daughters,JackcreatedtheBogleTrustaspartofhiscourtapprovedbankruptcyplan,accordingtoallegationsin
thelawsuit.
TheBogleTrustcontrolledBogleIndustriesInc.,whichownedmillionsofdollarsworthofNorthernVirginia
commercialrealestate.
WhenJackBoglediedin2012,thetrustended.Creditorswerepaidanapprovedportionofthecashvalue.
But,thelawsuitclaimed,HenryconspiredwithPaulMacdonald,describedasahandpickedyesman,totake
controlofBIIfortheirpersonalgain.Henrywrongfullytookcontrolof3,100sharesofBIIvotingpreferredstock,
thesuitalleged.
OnetooloftheallegedschemewasanirrevocablevotingproxygrantedtoHenrytoappointcompanymanagers,
thelawsuitsaid.Anotherallegedtoolwasanunconscionableandoppressiveoperatingagreementforasubsidiary,
givingHenrydictatorialcontrol.
TheMeuselawsuitisonlythelatestchallengetoHenryshandlingoftheBoglecompanies.
In2004,afterBobBoglewasreleasedfromprison,hedemandedaccesstoBIIscorporaterecordsunderDelaware
law.ThelawsuitclaimedHenryandMacdonaldpaidBobBogle$1milliontodroptheinspectiondemand.
WhenMeuseoneoftwoBogledaughterspressedforinformationin2005,HenryandMacdonaldprovidedscant
informationtoMeuseandtreatedherasifshehadnorighttotheinformationandwasameddlesome,greedy
woman,thesuitsaid.
TheaccusationsechoallegationsbyminorityshareholdersinTheDistheneGroupInc.,afamilyownedmining
company,whosuccessfullysuedtoenforcetheirinterestinthecompanysassets.Theirclaimsweresettledin2013with
$77millionchanginghands.
WhenMeusefiledsuitinDelawaretoinspecttheBoglecorporaterecordsin2007,sheallegedHenryandMacdonald
sparednoexpenseinfightingagainstdisclosureandobscuringMeusesindirectbeneficialinterestinthevoting
stockofBII.
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stockofBII.

Lawyeraccusedofselfdealinginhandlingoffamilyassets|VirginiaLawyersWeekly

MeusesaidshegaveintoHenryspressuretosettletheinspectionaction.Shesaidinhercurrentsuitshewouldnot
havesettledifshehadknownaboutinformationthatHenryandMacdonaldallegedlywithheld.
MeusealsofiledaVirginiaStateBarcomplaintagainstHenrywhiletheinspectionactionwaspending.Henry
providedthebarwithmisleadingandincompleteinformationtoavoiddiscipline,thelawsuitsaid.
Now,HenryandMacdonaldrunBIIanditssubsidiaryasiftheyweretheonlyowners,eventhoughtheyownzero
interestinanyoftheentities,thesuitsaid.TheyrefusetoaccountforthemoneytheytookfromtheBogleTrust
andthecompaniesinviolationofthetermsoftheBogleTrustandthegoverningdocumentsofthecompanies,
Meusecontended.
Meusessister,NancyFifeofNorthCarolina,supportsHenryinthedispute,Meusesaid.
Lastyear,MeusesentadraftbarcomplainttoHenryscounselandfollowedwithaformalrequestforrecordsfor
thesubsidiarycompany.AnotherlaterrequestsoughtrecordsofBII.
ResponsesweredelayedbecauseHenrysufferedaheartattackinSeptember,thelawsuitsaid.Throughattorneys,
HenryandMacdonalddeniedtherequestsforBIIinformationsayingtheylackedaproperpurpose.
ThecompanyvehementlydeniesanywrongdoingonthepartofMr.MacdonaldorMr.Henry,alawyerwrote,
accordingtotheMeuselawsuit.
Anotherattorneytermedtherequestforrecordsofthesubsidiarycompanyaprelitigationfishingexpedition,the
suitsaid.
MeusefiledherlawsuitJune23inAlexandriaCircuitCourt.ShesuedHenry,Macdonald,Fife,Henryslawfirmand
Henryswife,Donna,alsoalawyerathisfirm.
ThesuitallegesbreachoffiduciarydutyandlegalmalpracticebyHenryandhisfirm.Thesuitincludesshareholders
derivativeclaimsofbreachoftrustagainstHenry,thelawfirmandotherplayersinthedrama.Therealsoare
claimsofstatutoryandcommonlawconspiracyandaidingandabetting.
Meusesaidsheexpectedtoprovedamagesexceeding$12millionandtojustifypunitivedamagesofatleast$36
million.
Henrydidnotresponddirectlytoarequestforcomment,butMcLeanattorneyStephenM.SayersofHunton&
WilliamssaidhisfirmwillrepresentHenry.
InastatementauthorizedbyHenry,SayerssaidMeusehasbeenthreateninglitigationagainstsomeofthe
defendantsforyears,andactuallysuedoneofthedefendants,unsuccessfully,inDelaware,oncebefore.
Shehasbeenrepresentedbyapproximatelytenlawyerstodate,Sayerssaid.Wearecurrentlyreviewingthe
Plaintiffslatestallegations,butmostofthePlaintiffsmiscellaneousallegationsofwrongdoinghavebeenmade
before,theyaredeniedandtheywillbevigorouslydefended.
ThereisnorecordofpublicdisciplineofHenrybytheVirginiaStateBar.
Nojudgehasyetheardtheevidence,saidJohnH.CraddockJr.,whorepresentsMeusealongwithwifeandpartner
MicheleBurkeCraddock.Nofactfindershadallthefacts,hesaid.
Craddockacknowledgedthecoupleputasubstantialamountofworkintothelengthycomplaintandexpect
extensivediscoveryeffortsbeforetrial.
TheclaimsbyMeuseagainstHenryidentifyanumberofattorneyswhohavebeeninvolvedintheconflictinthe
pasteightyears:
BruceW.Henry(defendant)ofHenryandODonnellinAlexandriarepresentsbanks,businessesandcreditor
committeesincomplexbusinessbankruptcies,accordingtohisfirmswebsite.
StephenM.Sayers(Henryscounsel)ofHunton&WilliamsMcLeanofficereportsexperienceinbusinesstortsand
commercialcontractdisputes.
BernardJ.DiMuro(formerBIIcounsel)ofDiMuroGinsbergPCinAlexandriaisaformerpresidentoftheVirginia
StateBar.
DavidM.Osnos(formerMeusecounsel)ofArentFoxinWashingtonworksinrealestateacquisitionsandsales
RobertE.ScullyJr.(formerFifecounsel)ofStites&HarbisonsAlexandriaofficeisamemberofthebusiness
litigationservicegroup.
ThomasM.Wolf(formerMeusecounsel)ofLeClairRyaninRichmondfocusesonbusinesslitigationandwason
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Lawyeraccusedofselfdealinginhandlingoffamilyassets|VirginiaLawyersWeekly
ThomasM.Wolf(formerMeusecounsel)ofLeClairRyaninRichmondfocusesonbusinesslitigationandwason
theteamofcounselthatsuccessfullypursuedcorporateoppressionclaimsintheDisthenecase.
JohnH.CraddockJr.,MicheleBurkeCraddock(Meuselitigationcounsel)ofCraddockLawPLCofRichmond.John
CraddockalsorepresentedminorityshareholdersintheDisthenecase.

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