Law Firm Leader Faces Suit Over Ouster of CEO at Sales Coaching Venture
The suit marks the second time Callagy has been haled into federal court in the past 60 days. In April he was hit with a suit accusing him of defaulting on an $18 million litigation funding loan agreement.
June 22, 2020 at 04:23 PM
3 minute read
The head of a New Jersey law firm has been hit with a suit over control of a side business providing sales training and coaching.
Sean Callagy of Callagy Law in Paramus is accused in the lawsuit of ousting a CEO and part-owner of the company, Unblinded, and paying him a fraction of the true value of his stake. The suit, filed June 19 in U.S. District Court in Newark, says Callagy valued the company at $100,000 without undertaking a formal valuation despite a seven-figure revenue stream.
The suit marks the second time Callagy has been haled into federal court in the past 60 days. In April, he was hit with a suit accusing him of defaulting on an $18 million litigation funding loan agreement.
In the Unblinded suit, plaintiff Jared Yellin said he ran the company since its founding in November 2019 and holds a 24% share. Yellin said in the suit that Callagy and another defendant, Adam Gugino, asked him to give up his stake in the company for $25,000. Callagy has a 48% share and Gugino owns 24%, the suit claims.
Yellin says in the suit that he "believes that given the current and projected revenue streams and profitability, the value of this new company may be at least 30 times the amount 'proposed' by defendants. The majority's attempt to 'freeze out' plaintiff and deprive him of his interest in Unblinded in exchange for an arbitrary and capricious 'settlement' payment is the very essence minority oppression."
The suit seeks an order compelling Callagy and Gugino to purchase Yellin's ownership in the company at its fair value.
The suit includes claims of breach of fiduciary duty and a breach of loyalty, and brings a quantum meruit claim for services provided to the company by Yellin without compensation.
Callagy was not available for comment, said another attorney at his firm, Michael Smikun. Gugino, who holds the title of chief revenue officer at Unblinded, did not respond to an email.
The April suit accuses Callagy and his firm of failing to pay $18 million to a litigation funder that helped finance several personal injury cases. The suit also accuses Callagy and his firm of refusing to provide information about the status of the cases for which the funds were borrowed, according to the suit, by Legal Capital Group of Boca Raton, Florida.
That suit says Legal Capital provided 16 advances totaling $441,794 from January to September 2013 on personal injury cases brought by the Callagy firm and an additional $150,000 to attorney Benjamin Light and his firm, Aromando & Light, who are not named as defendants in the suit. Callagy, who was litigating several cases on behalf of Light, agreed to give a security interest in his firm's cases to secure the advance to Light, the suit says. The loans carried interest rates ranging from 1.99% to 4.99%, compounded monthly.
Callagy and his firm are represented in that case by Kevin Weber of Gibbons in Newark, who is due to answer or otherwise respond to the complaint by Aug. 3.
David Sprong of Becker in Livingston, who filed the suit on behalf of Yellin, also did not return a call about the case.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllAppellate Div. Follows Fed Reasoning on Recusal for Legislator-Turned-Judge
4 minute readChiesa Shahinian Bolsters Corporate Practice With 5 From Newark Boutique
5 minute read'A Mockery' of Deposition Rules: Walgreens Wins Sanctions Dispute Over Corporate Witness Allegedly Unfamiliar With Company
Law Firms Mentioned
Trending Stories
- 1The Pusillanimous Press
- 2Contract Lifecycle Management Company ContractPodAi Unveils Leah Drive
- 3'Great News' for Businesses? Judge Halts Transparency Mandate
- 4Consilio Announces ‘Native AI Review,’ Expanding Its Gen AI E-Discovery Offerings
- 5Federal Judge Hits US With $227,000 Sanction for Discovery Misconduct
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250