TCT, its owners and former directors pushed back last week on plaintiffs Joe and Barbara Campbell’s ongoing claims of impropriety in the Campbell versus Tri County Telephone Association lawsuit.
The suit names TCT president Chris Davidson, TCT CFO Steve Harper and former board members Dalin Winters, J.O Sutherland, Daniel Greet, Clifford Alexander and John K. Johnson as defendants. Also included as defendants are Neil Schlenker, accounting firm Hathaway and Kunz and attorney Michael Rosenthal.
The suit alleges that TCT held more than $90 million in hard assets when it was sold for $51 million in 2014. With millions of dollars held back, the suit alleges just $29 million of the sale price was paid to TCT cooperative owners.
“Plaintiffs are playing fast and loose with the facts in their pleadings. This was a sale that was based on multiple independent valuations. It is a sale that was approved by 80 percent of the members of the cooperative, members who were smart enough to know exactly what they were doing,” said Davidson in a press release.
The Campbells claim that they have produced 14,500 documents to the court along with 71 witnesses. For the defendants, the firm of Hathaway & Kunz has produced just one document, they allege.
However, Tim Stubson, attorney for defendant Davidson, said that most of the documents that the plaintiffs have produced originally came from TCT.
The plaintiffs allege in recently released court documents that the defendants are attempting to block discovery in this case.
Regarding the recent allegation that the defendants are attempting to block discovery and other information regarding the case, the defendants reject that claim.
The defendants claim they have asked the court to divide the case into two parts. The first would determine whether Joe Campbell, given “his personal dispute with TCT’s leadership and given his own personal financial interests in defeating the sale, is the right person to represent the members who approved the sale and recognized it as a fair deal,” the release states.
The second part is addressing the merits of the claims that have been made.
Stubson added that Campbell received a salary for being on the TCT board before the sale.
“In this case you see a disgruntled former board member, the only board member who opposed the sale. Mr. Campbell lost a regular paycheck as a result of the sale, so I understand his disappointment. However, his claim to represent a group of people who overwhelmingly rejected the same arguments he is making now when he made them at the time of the sale is concerning,” said Stubson in a press release.
A fair sale
The defendants claim that the 2014 sale was fair market value for the cooperative. They state that more than 650 community owners, roughly about 80 percent of the cooperative’s members, reviewed the sale and market value of the sale and approved of the transaction.
They also claim that TCT and the buyer, BHT Holdings, each independently hired third party consultants to review and assess TCT’s market value.
“This was the first sale of a telecommu- nications cooperative in Wyoming’s history. Assessing the exact value is unlike any other industry in the state, which is why experts were hired to provide valuation of TCT holdings and assets,” the release stated.
The defendants also claim that proper procedures were used and that before the transaction was negotiated and finalized the board of directors for TCT and officers of the cooperative mailed a summary of the proposed sale and meeting information for the member vote more than 90 days prior to the member vote.
The defendants also state that information regarding the sale was made available to the cooperative members by the following methods: The complete Ownership Purchase Agreement was made available to the cooperative’s members for review months in advance of the vote.
There were nine informational mailings to the members setting out the specific terms of the transaction.
Members had direct access to the board, which responded to specific member questions prior to the vote.
In addition, board members, Davidson and Schlenker provided information and responded to members’ questions and concerns through no fewer than three “town hall” meetings and several informative videos aired on local TV channels prior to the vote. In addition, Neil made himself available for one-on-one discussions with any concerned member for four hours before each town hall meeting.
They go on to state that members of the cooperative were encouraged to return their ballots by mail, hand delivery or by proxy. The members also were made aware that they could wait to cast their vote until the start of the final sale meeting and that members who cast their vote could change it up until the final vote at the meeting.
The defendants also claim that the 2014 sale of the cooperative was met with “overwhelming approval.” Of the 694 votes cast, there were 42 “no” votes for the sale.
Members who abstained from voting were counted in with the “no” votes.
“The approval of the sale was not the board’s or officers’ decision; it was the overwhelming vote of the community owners (nearly 80 percent voting in favor) after receiving detailed information regarding the sale and a 90-day period within which to review the material,” the release states.
Actions and Allegations The defendants claim that Joe Campbell, while serving on the board, was opposed to the 2014 sale. Even though aware of Campbell’s opposition, they state that no board member was removed due to the opposition. However, given the sale’s magnitude and sensitive nature, board members were asked to sign non-disclosure agreements, and when Campbell refused, he was temporarily prevented from practicing in sale negotiations and viewing associated confidential documents.
“The Plaintiffs, and the small group of members opposing the sale, held public meetings, paid for newspaper ads, created a website and distributed propaganda to members using personal membership information, including addresses, in an attempt to undermine the sale,” the release alleges.
The defendants also claim that allegations the plaintiffs have made regarding the net worth of TCT at the 2014 sale being $90 million is incorrect and that the value does not account for depreciation of assets and other assets that were not in use or did not even exist.
The defendants state in their release that plaintiffs’ allegation of the cash flow being at $7 million is false, as well, and misleading and “leans on improper methods of assessing worth for telecommunications companies.”
They also allege that the plaintiffs’ actions in the case are contrary to the interests of the former cooperative members, who “overwhelming” voted in favor of the transaction.
“This case is built on sensational and unsupported allegations. Time and again you witness courts seeing through these types of tactics and throwing cases out,” stated TCT attorney David Clark. “We are confident that will be the case here, as well.”
Court strikes plaintiffs’ pleadings
On Tuesday, April 18, the court issued an order striking the pleadings of the plaintiffs. The plaintiffs issued a response to the defendants’ motion to quash the subpoena served to Rep. Mike Greear, R-Worland, and a memorandum in opposition to the defendants’ motion for bifurcation of discovery.
In the court order, Judge Norman E. Young stated, “The court find pleadings to contain immaterial and impertinent matter, such as the clip-art contained on page three of the response and the clip-art of David Letterman on page 25 of the memorandum. These illustrations add nothing to the legal argument nor the parties’ respective positions. Such content is perceived by this court to be unprofessional and lacking in civility.”