Billionaire John S. Middleton is engaging in a legal battle with his younger sister, Anna K. Nupson, over a deal in which he bought her and others out of the family’s holding company for approximately $200 million.
Although Nupson has not yet brought forward any specific claims of wrongdoing against her brother, sources indicate that she plans to charge her brother with self-dealing.
In 2003, the family conglomerate, Bradford Holdings Inc., held multiple assets including part of the Phillies, a hotel chain, and a cigar company. The value of the latter, which was the family’s biggest asset, plummeted when class-action lawsuits were brought against tobacco companies.
Seeing an opportunity, Middleton offered to buy out shares held by Nupson, his other sister, and their mother for prices higher than the price suggested in previous appraisals of the firm. The deal was made for approximately $165 million – plus a $54 million dividend payment split among all family members.
The buyout turned out to be quite smart on Middleton’s part. Not long afterwards, stocks in tobacco companies began rebounding. And four years later, Middleton raked in massive profits by selling part of the firm for $2.9 billion.
Nupson and her attorneys will likely try to claim that Middleton made moves to consolidate his control over the company’s shares in order to facilitate the 2003 deal in a deceptive manner. However, Middleton says that he was released from claims of self-dealing as part of a negotiated family settlement.
Unfortunately, even family members can get into disputes over business transactions, especially when large assets are involved. If you are currently facing a contentious business dispute and need guidance from an experienced New York business attorney, please don’t hesitate to contact The Internicola Law Firm, P.C.