Economic strife in Italy over COVID-19 shutdowns has found its way into Miami-Dade Circuit Court, where Judge Michael Hanzman approved an emergency injunction for a Miami plaintiff who claims an Italian investor fired him in order to withdraw money for his ailing hotel business.

And lawyers suggest this type of suit points to future litigation trends, not unlike what followed the last financial markets collapse.

In this suit, attorney and AXS Law Group founding partner Jeff Gutchess represents addiction expert Dr. Bankole Johnson.

Gutchess' client chairs downtown Miami substance abuse treatment and research center the Global Institutes on Addictions Inc., which was slated to open around June.

But things changed when COVID-19 began to escalate and primary investor Roberto Ciapparelli's hotels shuttered, according to the complaint, which says Ciapparelli flew from North Italy to Miami to fire Johnson, the company's largest shareholder, without proper notice. Ciapparelli also allegedly withdrew about $900,000 in cashier's checks from the company.

Ciapparelli and other shareholders tried to withdraw another $4 million, according to Johnson's lawsuit, which sought a temporary injunction against the company, Ciapparelli, Ciapparelli's son-in-law Francesco Del Governatore, Italian scientist Antonello Bonci and Miami businessman Michael Wudyka.

That resulted in an emergency hearing—conducted online because of the coronavirus concerns.

"We managed to all pull it off despite, I think, every one of us on the computer being novices," Gutchess said. "Hanzman conducted it just like he would have conducted an emergency hearing in court. The defendants had two lawyers and two witnesses on the line and we had our client and two lawyers, and it just went off seamlessly."

Defendant Ciapparelli did not appear, according to Gutchess.

Defense attorneys Ira Gonzalez and Daniel Fors of Hinshaw & Culbertson in Coral Gables urged readers to gauge the veracity of the facts once their client responds to the allegations.

"Global Institutes on Addictions Inc. takes the allegations made by the former employee seriously, and through counsel, will respond to the allegations in due course and in the proper venue," they said via email.

The litigants are bound by arbitration, but Hanzman's order in the complex business litigation division means an arbitrator's decisions can't be thwarted in the meantime by any big withdrawals.

The ruling is blocked from public view pending redactions but, according to Gutchess, it means the defendants can't remove or transfer money from company bank accounts to shareholders or directors without unanimous written consent, and that the company can't pay out more than $25,000 without authorization.

"He [Hanzman] made sure that the company could operate, because we want the company to operate, we want the company to succeed," Gutchess said. "And at the same time, he made sure that the company couldn't be doing anything inappropriate with the funds in terms of wasting the money on paying high bills or paying higher salaries to the other officers and directors, or anybody related to them."

Obtaining this kind of emergency injunction is not usually an easy feat, according to Gutchess.

"It was a great result for the client, but it's also a nice positive development in Florida law, since we're striving to be arbitration-friendly here, to get more people to chose Miami as the base for their arbitrations," Gutchess said.

Italy is now on full lockdown, with more than 100,000 reported cases of COVID-19 and 11,591 deaths as of Monday afternoon.

Jeff Gutchess of AXS Law Group in Miami. Courtesy photo. Jeff Gutchess of AXS Law Group in Miami. Courtesy photo.

Gutchess, who handles many shareholder disputes, said lawsuits like this escalated during the 2008 financial crisis.

"It's often outward pressure that's driving one person or another to take precipitous action," Gutchess said.

Despite South Florida court closures, the emergency hearing was done and dusted within about 24 hours of the complaint being filed, according to Gutchess, who said quick action is good for Miami's business environment.

"I think it's a real testament to the Miami complex business litigation division and the procedure there to address an emergency like this … that the court would act so quickly to put an order in place," Gutchess said.

Johnson seeks $1.8 million in damages over lost salary, but if the defendants don't proceed with arbitration he'll seek about $8 million—the value of his equity stake.

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