Deal came back to bite company’s former owner, suit claims

Gentle Leaders were one of the products that helped Premier Pet Products hit it big. (photo by Michael Schwartz)

Gentle Leaders were one of the products that helped Premier Pet Products hit it big. (photo by Michael Schwartz)

Four years after selling her growing local pet products company, the firm’s founder and former president claims she got a raw deal thanks to her lawyers.

Sharon Madere, the former head of Premier Pet Products, is seeking $4 million in damages from law firm Christian & Barton and three of its partners in a suit filed June 23 in Richmond Circuit Court.

The crux of the case is whether Madere’s attorneys at Christian & Barton did an adequate job advising her when she negotiated the terms of the sale of Premier Pet Products company in 2010. The suit alleges Madere unwittingly signed a deal that would eventually cause her substantial monetary losses.

Madere alleges breach of contract and negligence against the firm and its attorneys, Edward B. Lumpkin, William J. Newman Jr., and Michael W. Smith, in their legal representation of her related to the sale process. Her suit claims the defendants “drafted and recommended a flawed transaction,” court filings show.

Madere launched Premier Pet in 1989, and by 2009 the company had grown to 90 employees, 7,500 accounts worldwide and a 70,000-square-foot facility in Midlothian, according to the suit. Its big product was the Gentle Leader, a popular head harness for dogs.

In 2010, Radio Systems Corp., also a pet product maker, bought Premier Pet for an untold sum. Madere hired Christian & Barton to represent her in the transaction.

The Knoxville, Tenn.-based pet company paid Madere a combination of cash and Radio Systems stock, according to the lawsuit. The shares were governed by a put-and-call agreement that included a five-year period of guaranteed minimum appreciation on the stock. In exchange, Radio Systems didn’t have to pay Madere as much cash up front.

Sharon Madere

Sharon Madere

Madere stayed on as president of Premier Pet, now a subsidiary of Radio Systems. The purpose of the stock agreement was for her to be able to sell back her shares at a later date at a premium, allowing her to realize the full value of the agreed-upon acquisition price.

But, according to the suit, Madere didn’t know about a provision in the agreement that allowed Radio Systems to buy back her shares in the company at their present value if she left Radio Systems for any reason.

Radio Systems didn’t renew Madere’s employment contract after February 2013, nearly two years shy of her stock appreciation agreement, the suit claims. The following month, the company bought back her stocks at their value at that time.

“Madere lost the final one year and eleven months of guaranteed appreciation of the stock and dividends under the terms of the sale, the value of which was substantial,” Madere’s suit claims.

Madere alleges that her attorneys at Christian & Barton did not bring this provision to her attention, either because they did not notice it in the contract or did not understand its significance.

In its response to the case filed this month, Christian & Barton denies that its attorneys did not realize the significance of the provision at question and say they brought it to Madere’s attention. The firm says it did not contribute to any losses she may have incurred.

“Any loss suffered by Ms. Madere, the existence of which Defendants expressly deny, were the result of acts and/or omissions on the part of Ms. Madere,” the defendants’ response states.

Madere declined to comment on the case last week when reached by email. She now runs a horse training business called EquiLightenment.

Christian & Barton’s Lumpkin would not comment on the case, and Newman and Smith could not be reached for comment.

Lee Livingston of Charlottesville-based Livingston Law Firm is representing Madere. Wyatt Durrette of DurretteCrump in Richmond is representing the defendants. Neither of the attorneys would comment on the case.

Both sides have asked for a jury trial.

Gentle Leaders were one of the products that helped Premier Pet Products hit it big. (photo by Michael Schwartz)

Gentle Leaders were one of the products that helped Premier Pet Products hit it big. (photo by Michael Schwartz)

Four years after selling her growing local pet products company, the firm’s founder and former president claims she got a raw deal thanks to her lawyers.

Sharon Madere, the former head of Premier Pet Products, is seeking $4 million in damages from law firm Christian & Barton and three of its partners in a suit filed June 23 in Richmond Circuit Court.

The crux of the case is whether Madere’s attorneys at Christian & Barton did an adequate job advising her when she negotiated the terms of the sale of Premier Pet Products company in 2010. The suit alleges Madere unwittingly signed a deal that would eventually cause her substantial monetary losses.

Madere alleges breach of contract and negligence against the firm and its attorneys, Edward B. Lumpkin, William J. Newman Jr., and Michael W. Smith, in their legal representation of her related to the sale process. Her suit claims the defendants “drafted and recommended a flawed transaction,” court filings show.

Madere launched Premier Pet in 1989, and by 2009 the company had grown to 90 employees, 7,500 accounts worldwide and a 70,000-square-foot facility in Midlothian, according to the suit. Its big product was the Gentle Leader, a popular head harness for dogs.

In 2010, Radio Systems Corp., also a pet product maker, bought Premier Pet for an untold sum. Madere hired Christian & Barton to represent her in the transaction.

The Knoxville, Tenn.-based pet company paid Madere a combination of cash and Radio Systems stock, according to the lawsuit. The shares were governed by a put-and-call agreement that included a five-year period of guaranteed minimum appreciation on the stock. In exchange, Radio Systems didn’t have to pay Madere as much cash up front.

Sharon Madere

Sharon Madere

Madere stayed on as president of Premier Pet, now a subsidiary of Radio Systems. The purpose of the stock agreement was for her to be able to sell back her shares at a later date at a premium, allowing her to realize the full value of the agreed-upon acquisition price.

But, according to the suit, Madere didn’t know about a provision in the agreement that allowed Radio Systems to buy back her shares in the company at their present value if she left Radio Systems for any reason.

Radio Systems didn’t renew Madere’s employment contract after February 2013, nearly two years shy of her stock appreciation agreement, the suit claims. The following month, the company bought back her stocks at their value at that time.

“Madere lost the final one year and eleven months of guaranteed appreciation of the stock and dividends under the terms of the sale, the value of which was substantial,” Madere’s suit claims.

Madere alleges that her attorneys at Christian & Barton did not bring this provision to her attention, either because they did not notice it in the contract or did not understand its significance.

In its response to the case filed this month, Christian & Barton denies that its attorneys did not realize the significance of the provision at question and say they brought it to Madere’s attention. The firm says it did not contribute to any losses she may have incurred.

“Any loss suffered by Ms. Madere, the existence of which Defendants expressly deny, were the result of acts and/or omissions on the part of Ms. Madere,” the defendants’ response states.

Madere declined to comment on the case last week when reached by email. She now runs a horse training business called EquiLightenment.

Christian & Barton’s Lumpkin would not comment on the case, and Newman and Smith could not be reached for comment.

Lee Livingston of Charlottesville-based Livingston Law Firm is representing Madere. Wyatt Durrette of DurretteCrump in Richmond is representing the defendants. Neither of the attorneys would comment on the case.

Both sides have asked for a jury trial.

Your subscription has expired. Renew now by choosing a subscription below!

For more informaiton, head over to your profile.

Profile


SUBSCRIBE NOW

TERMS OF SERVICE:

ALL MEMBERSHIPS RENEW AUTOMATICALLY. YOU WILL BE CHARGED FOR A 1 YEAR MEMBERSHIP RENEWAL AT THE RATE IN EFFECT AT THAT TIME UNLESS YOU CANCEL YOUR MEMBERSHIP BY LOGGING IN OR BY CONTACTING [email protected]

ALL CHARGES FOR MONTHLY OR ANNUAL MEMBERSHIPS ARE NONREFUNDABLE.

EACH MEMBERSHIP WILL ONLY FUNCTION ON UP TO 3 MACHINES. ACCOUNTS ABUSING THAT LIMIT WILL BE DISCONTINUED.




Return to Homepage

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments