Charles Morgan Moves to Dismiss First Orion Lawsuit

by Luke Jones  on Monday, Jun. 24, 2013 11:17 am  

Charles Morgan

Fotta's suit claims that Morgan didn't complete his original investment because of a "personal unavailability of cash."

But Morgan's motion for dismissal alleges that the completion of the investment was contingent on First Orion entering into a "significant agreement" with a national telecom company, and Fotta doesn't claim that First Orion did so during his tenure at the company. Morgan claims that he actually contributed $100,000 more than required.

In Fotta's suit, he claims that he was barred from participating in the company's leadership, but Morgan's response claims that Fotta abandoned First Orion immediately.

Fotta, the motion said, was not heard from for three years after he left the company. He originally filed suit in April, and defendants moved to dismiss it. He filed an amended suit in May that included the additional plaintiff shareholders.

The motion lists four reasons why the court should dismiss the suit:

  • Too much time had passed between when Fotta left the company and when he filed the lawsuit.
  • Fotta's claims don't demonstrate how Morgan's use of the proxy damaged First Orion.
  • Fotta's claims are barred by the proxy that Fotta signed in 2009, which allowed Morgan to "take any action regarding the stock of the company as the grantor might do."
  • The Chancery's Rule 19 prevents plaintiffs from rescinding Morgan's stock dividend without naming as defendants all parties who received the dividend, including Fotta. "Plaintiffs' attempt to utilize Mr. Morgan to represent all recipients of the dividend is an improper attempt at a representative action that finds no support under Delaware law," the motion said.



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