Citations
- 813 F. Supp. 2d 277
Full opinion text
OPINION AND ORDER
WILLIAM E. SMITH, District Judge.
Nine of the ten residuary beneficiaries (“Plaintiffs” or “Beneficiaries”) named in the will (the “Will”) of Magda L. Burt (“Decedent”) have brought suit claiming that Bank of America Corp. (the “Bank”), a co-executor of Decedent’s estate (the “Estate”), has breached the fiduciary-duties it owed to them. For the reasons that follow, the Court finds that the Bank breached its fiduciary duties to Plaintiffs and is liable to some of them in the amounts provided below.
The case was tried before this Court without a jury on October 25-29, 2010; November 1-2, 2010; and May 9-11, 2011. Having considered the evidence presented at trial and the pre-trial and post-trial memoranda submitted by the parties, the Court makes the following findings of fact and conclusions of law, pursuant to Federal Rule of Civil Procedure 52(a). To the extent that any finding of fact reflects a legal conclusion, it should be to that extent deemed a conclusion of law, and vice versa.
1. FINDINGS OF FACT
1. Decedent died on August 30,1987.
2. Decedent’s Will left the rest and residue of her Estate, including 2,256 shares of Class A non-voting common stock (the “Stock”) of Nyman Manufacturing Co. (“Nyman” or “the Company”), to the Beneficiaries.
3. Nyman was a closely held Rhode Island corporation that manufactured and sold disposable food containers.
4. There was no public market for the Stock.
5. Nyman was a family business. It was managed at the time of Decedent’s death by Walfred Nyman and his sons Robert and Kenneth. Walfred Nyman died in 1989, and the Company’s management passed to his sons.
6. Decedent was Walfred Nyman’s sister. All the Beneficiaries were family members or relatives of Decedent and of each other. For example, Beneficiaries Judith Lawton and Beverly Kiepler were sisters of Robert and Kenneth Nyman.
7. The Beneficiaries had no meaningful experience and no sophistication in financial dealings, including in transactions involving the stock of closely-held corporations.
8. On October 8, 1987, the Will was admitted to probate, and Robert Gates and the Rhode Island Hospital Trust (“RIHT”) were appointed co-executors of the Estate.
9. RIHT subsequently became part of the Bank, and the Bank succeeded RIHT as co-executor. Both RIHT and the Bank will be referred to as the Bank.
10. Notice of the co-executors’ qualification was published on October 27, 1987, starting the creditors’ claim period.
11. On October 27, 1987, the Bank noted the need for a valuation of the Stock and assigned one of its internal units to undertake the valuation.
12. The internal valuation, concluded in February 1988, valued the Stock at $383.04 per share as of August 31, 1987 for estate tax purposes.
13. The creditors’ claim period for the Estate expired on April 27,1988.
14. In May 1989, the Internal Revenue Service (“IRS”) selected the Estate for audit. Pursuant to its audit, which concluded in October 1989, the IRS increased the value of the Stock for estate tax purposes from $383.04 (the Bank’s initial valuation) to $403.35 per share. The Bank paid the IRS $24,604 in taxes as a result of the increased valuation.
15. On October 27, 1989, the co-executors filed an order of distribution with the probate court.
16. Some time early in the administration of the Estate (it is not clear exactly when), the co-executors approached Nyman to see if it would be interested in buying the Stock from the Estate. Nyman responded negatively.
17. The co-executors did not specify a price when they approached Nyman to gauge the Company’s interest in buying back the Stock.
18. On February 28, 1990, Robert Tyler, the Bank official primarily responsible for the Estate (and the person testifying on behalf of the Bank at trial), wrote to the Beneficiaries that the co-executors had paid the extra Rhode Island State taxes that had become due as a result of the IRS audit. He reported that, once the State acknowledged receipt of the payment and confirmed that no more taxes were due, “we will file a First and Final accounting of the executors with the Warwick Probate Court as soon as possible.” The letter went on to state:
That accounting is presently being prepared. A copy of that accounting will be sent to you for your review and approval as soon as it is complete. As soon as we have received your approval of the accounting, we will record that approval with the probate court. As soon as we have received all the beneficiaries approval [sic] and the court approval, we will distribute the remaining assets in the estate account immediately.
19. On May 25, 1990, Judith Lawton, one of the Beneficiaries, wrote to Tyler,
Three months ago you indicated a First and Final Accounting was then being prepared for the beneficiaries’ apprroval [sic.] so it could be filed with the Warwick Probate Court. Would you please update me regarding the progress of that accounting as we begin to approach the three-year anniversary of Mrs. Burt’s death.
Judith Lawton also communicated with Tyler by telephone and mail on several other occasions to inquire about the progress of the Estate. Tyler responded to some of these communications. His responses were to the effect that the co-executors were at work finalizing the accounting of the Estate and would be done with it soon, within weeks or months.
20. On July 11, 1990, Gates, the other co-executor, sent Tyler a copy of the final Rhode Island State tax bill. Gates also asked Tyler to “prepare the final accounting for the ... estate so that I may file it with the Probate Court and close the estate.”
21. On July 18, 1990, Tyler responded to Gates’s letter: “We have begun preparing the estate accounting for the executors and expect that it will be completed within several weeks. As soon as this is available, I will send it to you for your review and approval prior to sending it to the beneficiaries for their assent.”
22. On October 2, 1990, Judith Lawton wrote to Tyler again, expressing frustration with unkept promises that information about the Estate would be coming “within the week.” She wrote,
February 28th you wrote that a First and Final Accounting was then being prepared for the beneficiaries’ approvals so it could be filed with Warwick Probate Court. That was seven months ago. A month ago you told me that the Accounting Group was then preparing a summary. I am now requesting a formal update on this account stating when you expect the final documents to be prepared. This estate has been in your hands THREE years.
23. On November 23, 1990, Gates wrote to Tyler again to inquire about the status of the final account for the Estate.
24. On November 29, 1990, Tyler responded to Gates, indicating that the first and final account was “being prepared” and would hopefully be available for Gates’s review “within a few weeks.” Tyler explained that the “delay in the preparation of the account has been caused by adjustments to the computer records to reflect the many exchanges of worthless, replaced, and obsolete securities which Magda Burt held.”
25. On December 2, 1990, having not received a response to the part of her October 2 letter that had to do with the Estate, Judith Lawton wrote to Tyler again requesting an update on the Estate.
26. On January 18, 1991, Tyler distributed $1,000 to each of the Beneficiaries as “partial principal distribution of [the] residuary estate.” He also wrote that the “estate accounting has been completed and will be sent to you for your review and approval.”
27. On February 25, 1991, Gates inquired of Tyler again about the status of the accounting: “Your letter to me dated November 29, 1990, indicated that you were preparing the First and Final Account for- the [Estate] and that a draft would be ready for review within a few weeks. Please let me hear from you regarding the status of this matter.”
28. On March 1, 1991, Tyler sent Gates a first and final account, indicating that he would send it to the Beneficiaries once Gates approved it.
29. On March 11, 1991, Gates wrote back that he had reviewed the first and final account and that it appeared to be in order for mailing to the Beneficiaries.
30. On March 18, 1991, Tyler sent to the Beneficiaries a first and final account covering the period August 30, 1987 to January 3, 1991. Along with the accounting, Tyler enclosed a receipt and release (or indemnity) form which he asked them to sign and return if they approved of the accounting, so that the form and the accounting would be filed with the probate court.
31. Schedule B-6 of the first and final account, entitled “Distribution-Principal,” showed all 2,256 shares of the Stock as having been distributed in kind to the Beneficiaries, 225.60 shares each, on various dates between 1987 and 1990. However, in fact, none of the Stock had been distributed to the Beneficiaries during that time (nor was it ever distributed). Tyler knew that the Stock had not been distributed to the Beneficiaries; nevertheless, he recorded distributions to all Beneficiaries and inserted random dates for the distributions because he believed the Bank’s computer program would not permit completion of the form for the accounting otherwise.
32.One example of the receipt and release form accompanying the accounting read as follows:
1, Ronald W. Burt Jr., hereby acknowledge receipt from Robert B. Gates, Esq., and Rhode Island Hospital Trust National Bank, Co-executors of the Will of Magda L. Burt, of the following-described property:
Cash
Principal Cash $3,138.96
Income Cash $ 104.30
which, together with prior distributions, constitutes full payment and satisfaction of the rest, residue, and remainder of this estate, and having examined said Co-executor’s [sic] account covering the period from August 30, 1987, to January 3, 1991, and being satisfied therewith I hereby release and discharge said Rhode Island Hospital Trust National Bank and Robert B. Gates, Esq., from all claims, demands, causes of action and further accountability respecting said estate.
In consideration of the payment aforesaid being made at this time, without certainty of final adjustment of tax liability, I agree, for myself and my successors and assigns, to refund and return my proper proportionate share of such sum or sums as may ultimately be required by the co-executors for the payment of additional estate, inheritance, or income taxes, interest, and legal fees hereafter assessed against and determined to be payable by this estate.
33. On April 9, 1991, attorney Thomas Pearlman entered his appearance as counsel for Beneficiary Roland Burt and demanded “a complete audit of all assets and liabilities [in the Estate] and an appraisal thereof.”
34. During the course of the next few years, Roland Burt, through Pearlman, questioned the Co-Executors’ handling of the Estate and demanded from them many documents, including a copy of the first and final account. Pearlman would usually communicate with Gates, who would forward his requests for information to Tyler.
35. On June 25, 1991, Gates wrote to Tyler, ‘Would [you] please advise me of the status of the objection by Roland W. Burt Jr. to the Final Account and whether or not the Final Account is now in order for filing with the Probate Court.”
36. On July 28, 1991, Pearlman wrote to Gates that his “client is very upset on the way this Estate was handled,” and threatened litigation “[u]nless arrangements can be made to make good on ... losses” sustained by the co-executors’ alleged mishandling and overcharging of the Estate. There were subsequent threats and communications.
37. On October 21, 1991, Tyler sent to Roland Burt what he called a “revised accounting” of the Estate. This revised accounting was different from the first and final account previously sent — in that it did not identify the Stock as having been distributed and showed the balance of undistributed property remaining in the Estate.
38. Tyler also enclosed a “modified receipt form” which he asked Roland Burt to sign. Unlike the receipt and release form sent on March 18, 1991, which asked the Beneficiaries to accept the distributions hitherto made as “full payment and satisfaction” of their interest under the Will, this modified receipt form simply asked for an acknowledgment of receipt of the property indicated in the accounting.
39. On October 24, 1991, Tyler sent the revised accounting, as well as the modified receipt form, to Gates. Tyler asked Gates to review these documents and indicated, “With your approval, I will send the Account out to all the beneficiaries with the receipt.... I will also inform them that we plan to file the First Account and ask for its allowance in the Warwick Probate Court.”
40. The Bank did not send this revised accounting and modified receipt form to any of the Beneficiaries except for Roland Burt.
41. In 1992, the Office of the Comptroller of the Currency (which regulates national banks) issued new regulations mandating that banks conduct an annual review of certain closely held assets. This new mandate applied to shares of the Stock held by the Bank as co-trustee of the Walfred Nyman Trust. This stock was the same class as the stock in the Estate held for the Beneficiaries by the co-executors; however, it was held for the Walfred Nyman Trust and not for the Estate.
42. In compliance with these new regulations, the Bank’s Closely-Held Business Group reviewed Nyman’s financial information and undertook annual valuations of these shares. The valuations are as follows:
Date Carrying Value per share Book Value per share
02/25/1992 $104 $453
06/22/1993 $104 $491
03/22/1994 $104 $496
04/25/1995 $ 14 $ 14
04/25/1995 (revised) $182 $182
02/27/1996 $182 $182
04/23/1996 $104 $241
43. On March 17, 1992, James Ross, First Vice President at the Bank, advised Robert Nyman, co-trustee of the Walfred Nyman Trust, that the Bank’s $104 per share valuation was “at a deep discount” from $453 per share, which would be the value obtained “based on book value which is a normal way to view the company value.” Ross explained that the deeply discounted value “translates into a lower trustee fee.” As the chart shows, in subsequent years, the Bank sometimes suggested a carrying value at a discount from book value and sometimes simply took book value as carrying value.
44. On July 10, 1992, Tyler advised Gates that he had received several requests from the Beneficiaries for “at least a partial distribution of the estate residue at this time,” and asked him what he thought of that. He also asked Gates to review “the status of the account termination” and to “advise on how we should communicate to the residuary beneficiaries concerning the status of the estate accounting.”
45. On July 13, 1992, Gates wrote back that he had no objection to a partial distribution, provided the Beneficiaries executed indemnification agreements. He added that the Beneficiaries should be advised that Roland Burt, through his attorney, was still requesting information regarding the Estate.
46. On September 4, 1992, Tyler sent $282.80 in accumulated income from the Estate to each Beneficiary. He added, “The final accounting for the above referenced estate will be mailed to you shortly.”
47. On September 22, 1992, in the course of relaying another one of Pearl-man’s requests for information to Tyler— which he had been doing regularly since Pearlman’s entry of appearance on behalf of Roland Burt — Gates wrote, “If we cannot reach a prompt resolution of this matter with Attorney Pearlman, after we have furnished all available information to him, then we should file the accounting with the Probate Court and request a hearing.”
48. On January 15, 1993, Gates advised Pearlman that Nyman was not interested in buying the Stock, so it would be distributed in kind to the Beneficiaries.
49. On January 31, 1993, Pearlman wrote to Gates that Roland Burt would file suit if his outstanding issues regarding the administration of the Estate were not resolved within twenty days.
50. On February 2, Gates replied: “I am afraid there is nothing to settle here and that you will have to take whatever action you deem necessary.”
51. On the same day, Gates informed Tyler of his correspondence with Pearlman and asked him for “a corrected First Account which I intend to file with the Probate Court.”
52. On February 11, 1993, Tyler sent Gates an accounting of the Estate covering the period August 30, 1987 to January 3, 1991. He indicated that the Bank was “presently” updating the accounting through February 1, 1993 and would forward the updated accounting to Gates “as soon as this is complete.”
53. Gates wrote back the next day, noting that the accounting should run from October 8, 1987 (the date of the co-executors’ qualification), not August 30, 1987 (the date of Decedent’s death), and he asked for an updated accounting “as soon as possible for filing with the Probate Court.”
54. On February 26, 1993, Pearlman sent Gates a draft complaint which he said he would file in ten days if the matter was not amicably settled.
55. On March 3, 1993, Gates forwarded Pearlman’s letter and draft complaint to Tyler and asked, again, for “the completed First Account so that I may file it with the Court.”
56. On March 12, 1993, Roland Burt, represented by Pearlman, filed suit in Rhode Island Superior Court against the Bank, “individually and as executor of the estate of Magda L. Burt,” alleging negligence and breach of fiduciary duties in administering the Estate.
57. On March 31, 1993, the Bank, by its attorney Gates, filed an answer denying all allegations of wrongdoing.
58. On May 12, 1993, Tyler and Gates met with Roland Burt and Pearlman to discuss Roland Burt’s misgivings about the administration of the Estate. They did not get far. Pearlman did not explain Roland Burt’s concerns to Gates’s satisfaction and instead took him for a walk in a cemetery. At the end of the meeting, the co-executors still did not understand specifically what it was that Roland Burt was complaining about, and Roland Burt was not satisfied with the co-executors’ explanations.
59. On the same day, Gates wrote to Pearlman requesting a clarification of Roland Burt’s complaints. He added: “But for this litigation, the estate could be finalized and the Nyman stock and the remaining cash ($20,000.00) could be distributed to the beneficiaries. The cost of litigation is going to come from the $20,000.00.”
60. During the course of the co-executors’ subsequent communications with Roland Burt and Pearlman, it became clear that Roland Burt wanted cash for his shares of the Stock. Gates indicated to Pearlman that the co-executors had already attempted to sell the Stock back to Nyman, but Nyman would not buy it. Nevertheless, Roland Burt’s insistence prompted the co-executors to ask Nyman again about the prospects for a buyback of the Stock.
61. On August 3, 1993, Tyler wrote to Nyman, inquiring as to “the company’s prospects for redeeming any or all of’ the Stock. He did not specify a price. He also asked if Nyman would rather deal with the Beneficiaries individually after they had received their shares of the Stock.
62. On August 17, 1993, Robert Nyman, President of Nyman, responded that “the prospects for such a redemption are poor at this time.” The letter noted that, despite improving conditions and a return to profitability, Nyman was still struggling; further, its loan agreements with its bank lenders would prohibit redemption of the Stock. Nyman stated that it would have preferred negotiating with the co-executors (rather than the Beneficiaries individually), but it was in no position to do so at that time.
63. Gates informed Pearlman of Nyman’s position on the redemption of the Stock, but Pearlman wrote back that “[m]y client just does not believe they do not have the funds to buy out his interest.”
64. In 1993, the Rhode Island Supreme Court suspended Pearlman from the practice of law. This was neither the first nor the last time that he was suspended.
65. In March 1994, Nyman hired turnaround consultant Keith Johnson to help the Company reverse course and recover from setbacks in recent years.
66. On March 25, 1994, Tyler updated the Beneficiaries on the status of the Estate. He wrote, “Mrs. Burt’s estate remains open pending the resolution of a issues [sic] raised by Mr. Roland Burt. Mr. Burt, through his attorney, Mr. Pearlman, has questioned the handling of the estate assets, specifically, the Nyman Company manufacturing stock owned- by Mrs. Burt.” He explained that the co-executors had approached Nyman twice, the second time at Roland Burt’s request, to purchase the Stock, both times without success. Tyler further stated, “It is my understanding that each estate beneficiary may negotiate the sale or exchange of the stock directly with the company and then any other party.” The letter concluded:
Once the issue of the Nyman stock is resolved, we plan to file the estate accounting with the probate court and then distribute the stock and the remaining cash to the ten residuary beneficiaries. In the interim, we[ ] are updating the accounting which has previously been sent to all beneficiaries and asking them for their review and approval of it.
67. On October 5, 1994, Tyler sent Gates a draft first and final account for his review and approval. He stated, “We plan to file the Account with Warwick Probate Court as soon as possible and seek court allowance.”
68. Gates wrote back on October 19, 1994, noting that the accounting showed the Estate as having been fully distributed whereas in reality the Stock and some cash still remained in the Estate.
69. On December 9, 1994, Tyler sent the Beneficiaries a first and final account covering the period October 8, 1987 to September 1, 1994. He also enclosed a receipt and release form, which he asked the Beneficiaries to execute if they approved the accounting. Tyler closed by promising that “[u]nder separate cover you will receive the final distributions due you.”
70. Like the first and final account distributed on March 18, 1991, the first and final account distributed on December 9, 1994 showed the Stock as having been distributed in kind equally among the ten Beneficiaries (this time under Schedule B-7, entitled “Distributions — Principal”). But, in fact, the Stock had not been distributed by December 9, 1994, just as it had not been distributed by March 18, 1991, nor was it ever distributed to the Beneficiaries, “[ujnder separate cover” or otherwise.
71. The receipt and release form enclosed with the first and final account asked that each Beneficiary acknowledge receipt from the co-executors of various distributions, including 225.6 shares (one-tenth of the total shares) of the Stock. It also asked them to attest that these distributions, “together with prior distributions, constitute!] full payment and satisfaction of the rest, residue and remainder of this estate, and having examined said Co-executor’s [sic] account covering the period from October 8, 1987 to September 1, 1994, and being satisfied therewith I hereby release and discharge said Rhode Island Hospital Trust National Bank and Robert B. Gates from all claims, demands, causes of action, and further accountability respecting said estate.”
72. On the same day, Tyler informed Gates that he had sent a first and final account and a receipt and release form to each Beneficiary. “I do not, however, expect,” he wrote, “that all the beneficiaries will sign their releases.”
73. At various points between December 1994 and March 1995, Judith Lawton, Carol Lincoln, Janis Fisher, and probably also David Gilmore (as executor of the estate of his mother June Gilmore) signed and returned the receipt and release forms.
74. On December 14, 1994, Janice Leffingwell wrote to Tyler to complain about the receipt and release form. She wrote,
The accord portion asks me to assume 10% of all responsibility for any and all future claims, taxes, snafus, wills, etc. levied against the estate up to the amount of my share. Mr. Tyler, I do not have that kind of money. I can not guarantee that amount unless I risk my home and that I will not do.
75. Tyler did not write back or otherwise respond to Janice Leffingwell’s concerns.
76. On January 30, 1995, Robert Nyman, on behalf of Nyman, wrote to the co-executors in anticipation of what he thought would be the closing of the Estate “within the next few weeks.” The letter overwhelmingly emphasized Nyman’s losses and problems but also indicated that “the Company has good prospects for a turn-around and a return to, at least, a break-even performance with positive cash flow.” It went on to state that Nyman was contemplating an arrangement for some of its employees to buy Nyman stock from shareholders and asked whether the Beneficiaries would be interested in selling their Stock and whether the co-executors would represent the Beneficiaries in negotiating such a sale. Enclosed with the letter was a valuation placing the fair market value of the Stock “in the range of $25.00 per share.” However, Robert Nyman
emphasize[d] that the Company does not make, and I do not make, any representations as to the fair value of the Class A shares or as to the propriety or accuracy of the attached analysis. Any conclusion by the estate or by a beneficiary as to the fair value of the lass shares is the sole responsibility of the estate or such beneficiary.
77. Nyman’s letter of January 30, 1995 was referred to in numerous internal communications among Bank employees as an offer for the purchase of the Stock.
78. On February 17, 1995, Gates replied to Nyman that it was the co-executors’ position that “any negotiations for the purchase of Mrs. Burt’s Class A Nyman stock should be between the beneficiaries and the management group interested in the purchase.” He went on to note that the Bank’s initial valuation of the Stock (in 1988) and the IRS audit (in 1989) had assigned “a much higher value” to the Stock than “the offer amount” of $25 per share referenced in Nyman’s letter.
79. On the same day, Judith Lawton wrote to Tyler (copying Gates) to
put[ ] in writing a strong complaint against the finalization process of this estate. EVERY conversation with you ends with a statement that something, anything, will be mailed ‘within the week.’ Nothing ever is. At long last, when the December 9th letter came, I was cautiously optimistic regarding your statement that the final distributions would be mailed under separate cover— of course, it [sic] wasn’t.
As for Tyler’s excuse that the delay was due to Nyman’s recent overture to the co-executors to serve as intermediaries between the Beneficiaries and Nyman for a potential buyback of the Stock, Judith Lawton explained that “that request has only to do with AFTER the estate is closed and the stock has been distributed,” and thus “has nothing to do with this estate being finalized.” Judith Lawton closed by requesting that the co-executors “PLEASE expedite my aunt’s estate immediately so we can ALL put it to rest. It is annoying and exasperating to hear from you every six to eight months with another pacifying letter that never amounts to anything.”
80. The just quoted letter was an expression of the frustrations accumulated over the co-executors’ failure to finalize and distribute the Estate over the nearly nine years since their appointment. During those years, Judith Lawton and some of the other Beneficiaries repeatedly requested, orally and in writing, that the Estate be finalized and distributed and asked what was holding it up for so long. In response, Tyler repeatedly assured them that the co-executors were in the process of finalizing the Estate and would file an accounting with the probate court soon. Sometimes he specified that “soon” meant within weeks or months, and sometimes he left its meaning vague. Some of the Beneficiaries’ requests and Tyler’s responses have been excerpted above.
81. On March 2, 1995, attorney Marvin Homonoff informed Gates that he had entered his appearance on behalf of Ronald Burt (in place of the suspended Pearlman). Homonoff enclosed a Petition to Render an Account, which he said he would file unless the co-executors filed an account with the probate court.
82. On March 6, 1995, Gates filed a first and final account with the probate court and requested a hearing. This was the first accounting the co-executors filed with the probate court.
83. Gates informed Homonoff of the filing four days later.
84. This filing was followed by a series of probate court hearings, beginning on April 6, 1995 and culminating in a hearing on October 19, 1995. Various subjects were discussed at these hearings and further information was furnished at the request of the probate court. These subjects included the finalization of the Estate, the accounting for the Estate, the fees and expenses charged by the co-executors, and Roland Burt’s complaints.
85. At the first hearing on April 6, 1995, the probate court ordered that the co-executors file a proposed order of distribution.
86. On April 20, 1995, the co-executors filed a proposed order of distribution, praying that the probate court order the distribution of the assets remaining in the Estate, including the Stock. It showed the Stock at a value of $383.04 per share (per the Bank’s 1988 valuation). There is no record of the probate judge signing this order of distribution or of it being entered.
87. On April 26, 1995, Joan Grant wrote to Tyler that she did not wish to sell her shares of the Stock until after she retired, and she asked whether they could nonetheless be sold without her knowledge or consent.
88. On April 26, 1995, G. Norman Otto, in-house counsel at the Bank, wrote to Tyler and others at the Bank,
Should a partial dist. of the Nyman stock be done if approval of the acct drags on so the bene’s can address the offer to purchase from corp management to the bene’s?? Would we petition the Court to do partial dist?? I understand Nyman stk in estate has had no market until this year’s buy offer [i.e., Nyman’s letter of January 30, 1995]. I think the risk is holding Nyman & loosing [sic.] a sale in a falling market. Also, Dist. in kind is appropriate — sooner the better??
89. The next day, Jeremy Weir, a Bank Vice President who was an expert in closely-held corporations, wrote to Otto, Tyler, and others at the Bank,
Regarding the distribution of the estate, are we free to distribute at least the non-marketable shares, i.e. Nyman stock, at any time, once tax clearances have been received? If so, why have we not done so to remove RIHT from any claim for diminution of estate assets? Given the current situation, we may wish to discuss with counsel if distributing now raises any problems. There is certainly a rationale since we have received an offer and there have been discussions of having the offer go directly to the beneficiaries.
90. At the probate court hearing on April 28, 1995, four Beneficiaries indicated that they would like to receive their shares of the Stock. The co-executors indicated that, as Roland Burt was not willing to settle his claims, they did not want to distribute further assets from the Estate for fear that they would be needed to pay the expenses arising from Roland Burt’s suit. The probate court directed the co-executors to inquire from the Beneficiaries who were not present at the hearing whether they would be willing to accept their shares of the Stock in exchange for signing a general release.
91. Gates subsequently did so.
92. On May 1, 1995, in response to Gates’s inquiry, Raymond Cyr signed the receipt and returned the receipt and release form that Tyler had sent to him on December 9 of the previous year.
93. Beverly Kiepler, via her husband John Kiepler, objected to the receipt and release agreement. In response, Gates sent her a general release in boilerplate form on May 2. Beverly Kiepler did not sign and return this form.
94. On May 23, 1995, Robert Nyman, on behalf of Nyman, wrote to the Bank requesting that the Bank lower the carrying value assigned to the Stock.
95. At a hearing in June 1995, the probate court requested that the co-executors provide the Beneficiaries with copies of appraisals, correspondence, tax returns, fee schedules, and other information. The probate court also directed the co-executors to modify the first and final account and make it a first account, in view of the fact that the Estate had not been fully distributed.
96. On June 26, 1995, pursuant to the probate court’s order, Tyler sent the Beneficiaries a packet containing various records and documents, as well as an amended first account, covering the period October 8, 1987 to June 2, 1995.
97. Unlike the two versions of the account previously distributed to the Beneficiaries (on March 18, 1991 and December 9, 1994), the amended first account correctly categorized the Stock as an undistributed asset remaining in the Estate, rather than as an asset that had been distributed. This time, the Stock was classified under Schedule C-1 as “Principal Remaining on Hand,” rather than under distributions in Schedule B.
98. In July 1995, Keith Johnson was appointed President and Chief Operating Officer of Nyman. Robert Nyman continued to serve as Chairman of the Board of Directors and Chief Executive Officer. Johnson had been involved in the management of Nyman in a senior executive capacity since well before this formal elevation.
99. On July 25, 1995, Johnson met with Gates and relayed to him an offer by Nyman to purchase the Stock for $145.36 per share. The offer was conditioned on the acceptance of all Beneficiaries by August 18 and on certain lenders’ waiver of buyback prohibitions in Nyman’s loan agreements. The price of $145.36 was derived by taking the book value of $181.71 from the most recent audited financials and discounting it by twenty percent due to lack of marketability and control.
100. The following day, Gates updated Tyler on Nyman’s offer and Gates’s response to it: “They want us to act as a go-between; however, I have advised them that we would not act in that capacity.”
101. Gates also contacted Homonoff to inform him of Nyman’s offer. He responded that he was not authorized to discuss the matter until after the probate court’s decision.
102. At this time, Gates did not want to act as a “go-between” between Nyman and the Beneficiaries because he did not want to push a deal regarding which he did not have sufficient information nor sufficient time to gather the necessary information. Gates had not been conversant with the financial situation of Nyman; the data, if any, were in the Bank’s possession. He was leery of Nyman’s offer because, based on his limited knowledge, he thought the information provided by Nyman portrayed the Company in too bleak a light and the offer price of $145.36 per share was too low. Based on his information at the time and without further investigation (which further investigation the co-executors never undertook), Gates believed that a fair price would be $403.35 per share. This was the value arrived at by the Bank’s valuation for estate tax purposes as adjusted by the IRS audit. See supra ¶ 14. Even though this valuation was as of the date of Decedent’s death, Gates thought that given the lack of a market for the Stock and in the absence of other information about its value, it was the only available yardstick for a measurement of value.
103. On August 2, 1995, Tyler, Weir, and Gates met with Johnson to discuss Nyman’s offer to redeem the Stock. At the meeting, Johnson reviewed the financial condition of the Company and promised to submit a detailed written redemption offer by the close of business on August 4.
104. At this point, the Bank internally discussed potential responses to Nyman’s anticipated formal offer. Three options were identified: (1) distribute the Stock to the Beneficiaries and let them make the decision; (2) hold on to the Stock and negotiate with Nyman; or (3) “seek the approval and indemnification of all parties to act in tendering our shares for redemption.”
105. On August 4, 1995, Nyman formally offered to purchase the Stock from the Estate for $145.36 per share. The offer was conditioned on all Beneficiaries’ approval by September 15 and on Nyman’s success in obtaining waivers of covenants in its loan agreements that prohibited the repurchase of Nyman stock. The offer letter described the state of the Company and included certain financial data.
106. In a cover letter accompanying the offer materials, Johnson indicated Nyman’s expectation, based on the meeting of August 2, that the co-executors would review the information furnished by Nyman and request such other information as they deemed appropriate to adequately evaluate the offer. “The executors will also arrange an informational meeting for the beneficiaries in order to answer any questions or respond to concerns related to the offer in a timely manner.” In view of the tight response time, “Nyman expects that the executors will initiate their communication with the beneficiaries by August 11th and will have scheduled an informational meeting during the week of August 21st.”
107. On August 10, 1995, the co-executors sent a packet to the Beneficiaries relaying Nyman’s offer and a redacted version of Nyman’s offer letter and materials. The co-executors stated that they “have reached no conclusions with respect to the proposed offer by Nyman” and asked that each Beneficiary review the information sent by Nyman and make his or her own decision. They gave the Beneficiaries until August 22 to respond, by indicating their approval or disapproval on an enclosed form. Failure to respond by August 22 would count as a disapproval.
108. The Beneficiaries did not receive the packet until August 15 or 16, 1995, effectively giving them a few days to consider the offer and respond.
109. The co-executors did not request any further information or materials from Nyman in connection with Nyman’s offer.
110. The co-executors never determined whether they had sufficient information to adequately evaluate Nyman’s offer.
111. The co-executors did not perform any independent research in connection with Nyman’s offer, did not independently evaluate Nyman’s offer, and did not independently investigate the business or financial condition of Nyman.
112. The co-executors never negotiated, nor attempted to negotiate, with Nyman to obtain a higher price or more favorable conditions for the offer.
113. The Bank never formed an opinion as to the value of the Stock in connection with Nyman’s offer.
114. The co-executors did not arrange an informational meeting with the Beneficiaries to explain Nyman’s offer and answer the Beneficiaries’ questions about it.
115. On August 11, 1995, Johnson wrote to Tyler that, since Decedent’s death, the value of Nyman’s real estate had significantly declined, “equivalent to $479.69 per share.”
116. On August 16, 1995, David Gilmore, on behalf of the estate of his mother June Gilmore, approved Nyman’s offer.
117. On August 17, 1995, Judith Law-ton approved Nyman’s offer.
118. On August 18, 1995, Beverly Kiepler approved Nyman’s offer.
119. On August 18, 1995, Janice Leffingwell approved Nyman’s offer on the condition that the Estate would bear no more fees.
120. In a letter to the Beneficiaries dated August 22, 1995, Tyler relayed the information that he had received from Johnson on August 11 regarding the value of Nyman real estate; advised that Nyman, not the Estate, would bear the costs of the proposed transaction; and stated that Nyman had extended the response deadline from August 22 to August 31.
121. In fact, Nyman’s response deadline was September 15, 1995. August 22 and August 31 were the co-executors’ self-imposed deadlines for the Beneficiaries.
122. On August 24, 1995, Raymond Cyr rejected Nyman’s offer, writing, “I want at least $65,000 for my 1/10 no less. I have some interest in it for that.” Cyr got the $65,000 figure from a conversation he had had with Tyler in 1989, when he had come to Rhode Island from Florida after the death of his sister. Tyler had told him then that his shares of the Stock were worth “ballpark” around $60,000-$70,000 depending on the market, and the number had stuck with him.
123. On August 25, 1995, Carol Lincoln rejected Nyman’s offer.
124. Some time between August 25 and August 28, 1995, Robert Nyman called Raymond Cyr. They were cousins, and they got talking like cousins do, among other things about Raymond Cyr’s boat-building days. Then, Robert Nyman told Raymond Cyr that he should approve the offer, because all other Beneficiaries had approved it, and he was the one person holding up the sale. At this point, Robert Nyman did not know that Raymond Cyr had already rejected the offer, and Raymond Cyr did not tell him.
125. A few days after their initial telephone conversation, Robert Nyman again called Raymond Cyr. This time Robert Nyman had learned (apparently from the Bank) that Raymond Cyr had rejected Nyman’s offer, and according to Raymond Cyr, “boy he was hot.” He told Raymond Cyr again that he was the only Beneficiary who had not signed the approval form and was holding up the sale and urged him to sign. Raymond Cyr asked whether certain other Beneficiaries had signed, and Robert Nyman responded that they had. Raymond Cyr told Robert Nyman to send him another form and agreed to sign it.
126. On August 30, 1995, Raymond Cyr approved Nyman’s offer.
127. In sum, David Gilmore (as executor of the estate of June Gilmore), Judith Lawton, Beverley Kiepler, Janice Leffingwell, and Raymond Cyr approved Nyman’s offer. Beverley Kiepler would subsequently revoke her approval. Carol Lincoln expressly rejected the offer. The remaining Beneficiaries — Joyce Hendricks, Joan Grant, Roland Burt, Janis Fisher — • never formally respond to Nyman’s offer, which counted as a rejection.
128. On August 31 and September 7, 1995, respectively, CoreStates Bank and Heller Financial waived any breach of the stock repurchase restrictions in their loan agreements with Nyman arising from Nyman’s proposed redemption of the Stock.
129. Not having been accepted by all Beneficiaries, Nyman’s offer to repurchase the Stock expired by its terms at 3 p.m. on September 15, 1995.
130. Nyman never renewed its offer to purchase the Stock. However, Nyman representatives did express continued interest in buying the Stock during subsequent meetings and communications with the co-executors.
131. On September 20, 1995, Weir, Tyler, and Gates met with Johnson and attorney Gary Yesser. (Yesser had joined the Nyman team in communicating with the co-executors about the offer to repurchase the Stock.) The co-executors informed the Nyman representatives of the Beneficiaries’ responses to the offer. Yesser was emphatic that Nyman would only purchase the shares of all, not some or most, of the Beneficiaries. Johnson revealed that he had been calling the Beneficiaries to elicit support for the transaction and reported that some of them had expressed concerns. He said that the concerns did not involve price but revolved mostly around perceptions of the Bank’s overcharging and lying to the Beneficiaries. Johnson said he believed that these concerns could be resolved and offered to mediate between the co-executors and the Beneficiaries and clarify the offer to the Beneficiaries. Johnson and Yesser also offered to step into the probate court hearings to convince the judge to authorize the sale. Finally, Yesser and Johnson told the co-executors that Nyman was not for sale and that Nyman’s management had not discussed and was not contemplating a sale of the Company. They offered to sign a representation and warranty to that effect.
132. The co-executors never took up Nyman on its offer to execute a representation and warranty that Nyman was not for sale and no sale was in contemplation.
133. Gates told the Bank, as he had done before, see supra ¶¶ 100, 102, that he would rather distribute the Stock to the Beneficiaries than sell it to Nyman.
134. Subsequently, the Bank internally discussed the looming offer and the vista before them. Weir believed that the co-executors needed outside counsel to assist them with several issues, including “the risk of involving or appearing to involve Nyman to resolve estate issues or appear to be conspiring against our beneficiaries,” and “avoiding a trap by Nyman, i.e. getting a sale done and having the company sold for a significantly higher price within a year or two thereafter, although Gary offered to represent and warrant that the company was not for sale and that no consideration of sale has been or is being discussed.”
135. The Bank never engaged outside counsel in connection with Nyman’s repurchase offer, nor in connection with the concerns identified by Weir.
136. Pursuant to further internal discussions, including a conference call among Tyler, Weir, and Otto, the Bank decided (as Gates had decided before) that in-kind distribution of the Stock was the course of action that best served the interests of the Beneficiaries. This decision was reached no later than September 22, 1995.
137. The Bank subsequently communicated this decision to Gates and asked him to prepare a petition for distribution to present to the probate court.
138. Gates told Nyman that the co-executors would not file a petition for distribution with the probate court unless Nyman paid the fees for drafting and presenting the petition.
139. Gates intended, on behalf of the co-executors, to distribute the Stock without seeking probate court approval in the event that Nyman would not agree to pay the fees associated with the petition.
140. Nyman agreed to pay Gates’s fees for drafting and presenting the petition.
141. Nyman asked that the co-executors include information about its offer in the petition.
142. The co-executors allowed Nyman to have input into the content of the petition.
143. On September 28, 1995, the co-executors petitioned the probate court for distribution of the Stock. The petition sought a distribution upon obtaining a receipt and standard indemnity agreement from the Beneficiaries to indemnify the co-executors for any expenses arising from lawsuits challenging their administration of the Estate. The petition also described Nyman’s offer to purchase the Stock, stated that six Beneficiaries had accepted the offer, and mentioned that Nyman had expressed continued interest in purchasing the Stock.
144. In fact, only five Beneficiaries had accepted the offer as of that date. See supra ¶ 127.
145. By the next day, the co-executors sent a copy of the petition to the Beneficiaries and informed them of the upcoming probate court hearing on the petition, scheduled for October 19, 1995.
146. Meanwhile, the co-executors kept in contact with Nyman, for example, attending a conference with Johnson on October 17, 1995.
147. On October 18, 1995, Beverley Kiepler, by her husband John Kiepler, revoked her earlier approval of Nyman’s repurchase offer, objecting to the indemnification requirement referenced in the co-executors’ letter of August 22.
148. Going into the October 19, 1995 probate court hearing, both co-executors believed that an in-kind distribution of the Stock to the Beneficiaries was the course of action that best suited the interests of the Estate and the Beneficiaries.
149. On October 19, 1995, a hearing was held before the probate court. Tyler, Gates, Yesser, Homonoff (Roland Burt’s attorney), and Beneficiaries Judith Lawton, Joan Grant, Carol Lincoln, Janice Leffingwell, Joyce Hendricks, Janis Fisher, and Roland Burt were among those in attendance. John Kiepler was present on behalf of Beneficiary Beverly Kiepler. Beneficiaries Raymond Cyr and June Gilmore were not in attendance.
150. Two issues were before the court at this hearing: (1) the amended first account filed by the co-executors on March 6, 1995; (2) the co-executors’ petition for distribution.
151. At the probate court hearing, Gates presented the petition by reading from it. Then, Yesser, on behalf of Nyman, gave a speech urging the sale of the Stock to the Beneficiaries, pursuant to the terms of Nyman’s previous offer, presenting it as a great deal for the Beneficiaries. Even though the co-executors continued to believe that distribution best served the Beneficiaries’ interest, they did not renew their request for a distribution, did not contradict Yesser’s pitch for a sale of the Stock, and did not in any way respond to Yesser’s comments. Under the circumstances, in view of the co-executors’ perfunctory presentation of the petition, coupled with their utter passivity in the face of a forceful argument in support of a course of action directly contradicting the petition, it would have been reasonable for the probate court to interpret the co-executors’ conduct as a whole during the hearing as favoring the sale or at least as an attitude of equal preference between the outcomes of sale and distribution. This was not, in fact, the attitude of the co-executors. Rather, they continued to believe that distribution best served the Beneficiaries’ interest.
152. At the probate court hearing, Carol Lincoln and Joan Grant attempted to voice their concerns and objections with respect to the sale of their shares of the Stock without their consent. The probate court would not hear them out.
153. After Gates and Yesser had made their presentations, the probate court (1) allowed the amended first account and (2) ordered the sale of the Stock to Nyman at $145.36 per share. The probate court ordered that the co-executors distribute $5,000 from the proceeds of the sale to each Beneficiary and remit the balance ($277,932) to the probate court registry for deposit into an escrow account. The proceeds in escrow were to be distributed upon the court’s order (to be entered when it had determined that all outstanding issues regarding the Estate had been resolved). The court directed the co-executors to prepare an order setting forth these rulings for the court to sign.
154. The co-executors did not appeal the probate court’s order or move for its reconsideration.
155. The co-executors did not advise the Beneficiaries of their right to appeal the probate court’s order. See infra at 94.
156. The day after the probate court hearing, Tyler noted, in a memorandum to his colleagues at the Bank, that Roland Burt’s suit was still pending in the Superi- or Court. He wrote, “It is hoped that the delay in distributing the balance of the escrowed proceeds from the stock sale will serve as leverage in bringing the Superior Court action to resolution.”
157. On the day following the probate court hearing, Judith Lawton wrote a letter pleading with Roland Burt to drop his lawsuit as its expenses would come out of the Estate.
158. On October 24,1995, Yesser urged Gates to expeditiously prepare a draft order setting forth the probate court’s rulings on October 19 and to share the draft order with him. “Given the high degree of acrimony regarding the beneficiaries, I do think that the closing should be expedited .... ” Gates complied. Yesser reviewed the draft order and said he had “no objection to it immediately being filed.”
159. On October 25, 1995, Gates filed a proposed order for the probate court to sign.
160. On November 2, 1995, Judith Lawton again pleaded with Roland Burt to drop his lawsuit so that the Estate could be closed.
161. On November 2, 1995, the probate court entered an order approving the amended first account and ordering the sale of the Stock to Nyman at $145.36 per share.
162. The probate court’s rulings could be appealed by any interested party within twenty days.
163. On November 6, 1995, the co-executors and Nyman closed the sale of the Stock in escrow, with Yesser acting as escrow agent.
164. The next day, Pearlman advised Gates that he would be reentering the scene as Ronald Burt’s counsel and demanded $150,000 in settlement of his client’s claims. He insisted on an answer by the following day. Gates relayed the information to Yesser. Subsequent inquiry revealed that Pearlman had been reinstated to the Rhode Island bar.
165. On November 8, 1995, Yesser, as escrow agent, established an escrow account to hold the $327,932 in undistributed proceeds from the sale of the Stock.
166. On November 21, 1995, Judith Lawton wrote to her fellow Beneficiaries, expressing concerns over how the continuation of Roland Burt’s lawsuit was harming them all. She was particularly worried that the expenses of defending the suit would come out of the Estate.
167. At this point, Nyman, probably via Johnson, had relayed the information regarding Pearlman’s recent reinstatement to the bar and Roland Burt’s continued prosecution of his lawsuit to Judith Law-ton. When she agitated for the settlement of Roland Burt’s suit in October-November 1995, Judith Lawton was under Johnson’s influence and believed that Nyman had done the Beneficiaries a favor by repurchasing the Stock (an attitude that later changed dramatically). See supra at 23 n. 11. She continued to find fault with the Bank for delaying the administration of the Estate for so long, but her misgivings on the subject were tempered by her sense that she had gotten a very good deal in the sale of Stock to Nyman.
168. In late November 1995, after ascertaining that no appeal had been taken from the order of the probate court, Yesser sent $50,000 of the sale proceeds to the co-executors (who subsequently forwarded them to the Beneficiaries) and sent the balance of $277,932 to be deposited in the probate registry.
169. On December 4, 1995, Judith Lawton wrote to Gates that she wanted her share of the proceeds held in escrow. She said that she was prepared to sign an agreement to reimburse the Estate for any subsequently arising taxes or expenses in exchange for her share of the proceeds. She closed by requesting that Gates seek the probate court’s permission to distribute the funds held in escrow to each Beneficiary willing to sign a receipt and indemnification agreement.
170. The co-executors did not act on Judith Lawton’s request.
171. On December 11, 1995, Gates sent Yesser a bill in the amount of $3,940 for legal work performed by Gates “in connection with the offer of Nyman manufacturing Co. to buy back 2,256 shares of the Class A Common Stock owned by the Estate.”
172. Nyman paid Gates’s bill.
173. On December 14, 1995, Raymond Cyr wrote to Roland Burt, copying Judith Lawton and the Bank, and implored him to drop his lawsuit:
Roland, the only people that make money out of this kind of ease are the attorneys ____I do not think it is fair on your part to hold the distribution of fund[s] to the beneficiaries, who could use these funds.... I have to admit, I wish they had sent me my share of the stocks instead of selling it as she did have some good ones. I am not happy with the way it turned out, but I do not see the sense in going any further.
174. On January 10, 1996, the Bank engaged Steven E. Snow of Partridge Snow & Hahn LLP to represent it in the Roland Burt suit.
175. Snow continues to represent the Bank in the present litigation.
176. On January 23, 1996, Nyman offered to purchase the shares of Stock held in the Walfred Nyman Trust for $145.36 (the same price as it had paid for the shares of Stock in the Estate).
177. The Bank, as trustee of the Walfred Nyman Trust, responded that, “in order for us to perform our fiduciary responsibility in reviewing this transaction,” it needed further information — -specifically, the most recent interim financial statements, Nyman’s bylaws, and the name of an individual at Nyman who would be able to address questions regarding Nyman’s operations and financial statements.
178. In subsequent internal communications regarding Nyman’s offer to purchase the Walfred Nyman Trust shares, Weir indicated that Johnson of Nyman “is concerned about any buyout at a price different from the Magda Burt Estate, but I believe that is not our problem. We need to address the situation based on the information we have.”
179. Subsequently, officers at the Bank put substantial effort into evaluating the desirability of Nyman’s offer to purchase the Walfred Nyman Trust shares, which by far exceeded their efforts in connection with Nyman’s offer to purchase the Stock from the Estate.
180. At the end, Beverly Kiepler, who was a beneficiary of the Walfred Nyman Trust, as well as a Beneficiary of the Estate, objected to Nyman’s offer to buy the shares held by the Trust. Given the objection, the Bank as trustee rejected the offer.
181. On March 19, 1996, pursuant to a petition filed pro se by Judith Lawton, the probate court authorized the release of an additional $125,000 from the Stock sale proceeds to the Estate.
182. Pursuant to this authorization, Tyler sent a check for $12,500 to each Beneficiary on March 26,1996.
183. The remaining funds from the sale of the Stock to Nyman are still held in the probate court registry.
184. On March 28,1996, Judith Lawton wrote to Roland Burt again, urging him to drop his lawsuit so that the Estate could be closed. She cautioned him that he would not prevail in the suit and that the expenses of it would come out of the Estate.
185. In May 1996, Nyman offered to redeem all outstanding shares of the Stock held individually or as part of the Walfred Nyman Trust by Beverly Kiepler and Judith Lawton (as well as other family members) for $200 per share.
186. Beverly Kiepler rejected the offer, stating that, as long as her brothers (Robert and Kenneth Nyman, both executives at Nyman) were keeping their Stock, she would keep hers too. She kept her shares of the Stock until September 1997, when she sold them to Van Leer (see infra ¶¶ 189-190).
187. Judith Lawton accepted the offer and sold her remaining shares of the Stock to Nyman for $200 per share on May 30, 1996.
188. In August 1996, Keith Johnson and Robert Nyman met with the consulting firm Shields & Company, Inc. to discuss, among other things, a potential sale of Nyman.
189. On September 29, 1997, after a series of meetings and negotiations, Nyman was sold to Royal Packaging Industries Van Leer N.V. (“Van Leer”), a Dutch corporation.
190. Holders of Class A non-voting common stock of Nyman received $1,667.38 per share in the sale to Van Leer.
191. After the Van Leer sale, Judith Lawton and Beverly Kiepler separately sued Nyman executives for fraud and breach of fiduciary duties.
192. On January 17, 2002, Judge Ernest Torres of this Court issued a decision in Kiepler v. Nyman, CA No. 98-272-T, 2002 WL 221622, 2002 U.S. Dist. LEXIS 19630 (D.R.I. Jan. 17, 2002). In this suit, Beverly Kiepler and her daughter alleged that Johnson and Robert and Kenneth Nyman breached their fiduciary duties as directors and officers of Nyman by awarding themselves options to purchase Nyman stock and by purchasing shares of treasury stock for amounts less than fair value, thereby unjustly enriching themselves, diluting the plaintiffs’ interest in the Company, and diminishing the amount the plaintiffs received when the Company was sold to Van Leer. After a bench trial, Judge Torres found for plaintiffs and awarded them $573,443.53, plus interest, in damages. Defendants subsequently appealed, and the parties settled. According to John Kiepler’s testimony at the trial of the present case, by the combined amount of this settlement and Beverly Kiepler’s sales of her shares to Van Leer, Beverly Kiepler received around $2,400 to $2,500 for each share of Nyman Class A stock that she held (other than those in the Estate).
193. On January 17, 2002, Judge Torres issued a decision in Lawton v. Nyman, CA No. 98-288-T, 2002 WL 221621, 2002 U.S. Dist. LEXIS 17398 (D.R.I. Jan. 17, 2002). In this suit, Judith Lawton and members of her family brought claims for fraud and breach of fiduciary duty against Nyman, Robert and Kenneth Nyman, and Johnson, claiming