Sinkhole company partners are mired in civil dispute

by Michael Mosher on June 14, 2012

If nothing else, the brains behind a fledgling sinkhole repair business knew how to get noticed.

Universal Ground Services and Construction Co. reeled in customers with a singing animated groundhog and catchy lyrics and melodies. Its commercial spots remain in steady rotation on local Bright House stations.

The company has also been making headlines recently, but not in a good way.

During the past few weeks, fame and optimism made way for notoriety and misery. A once-ambitious business partnership has been derailed by hostile takeovers, court injunctions, public insults, criminal allegations — and for good measure — a raging fire.

As of Tuesday, the Brooksville-based company was still in a holding pattern. A judge ruled no one would be allowed to spend any money or move any vehicles off the property.

Robert Brown, previously the sole shareholder, retained 49 percent of the common stock in the business following an agreement signed in October 2011. He transferred 51 percent to Todd Smith.

Brown remained president and Smith became vice president, chief operations officer and treasurer.

Today the two are involved in a bitter legal war.

Brown, 49, threw the first punch – and it landed. On May 13, a couple days prior to a scheduled shareholders meeting, he seized control of the business with assistance from law enforcement, according to court documents.

Smith’s attorney, during an injunction hearing Monday in Hernando County Circuit Court, said Brown carried out a “hostile takeover” with a plan in mind “to ruin this company.”

Employees loyal to Smith filed reports with the Hernando County Sheriff’s Office alleging they were harassed, threatened and illegally searched while Brown assumed power.

Brown’s attorney said his client — prior to the takeover — discovered checks lying around the office with forged endorsements. Brown sensed unethical behavior from his business partner and reacted accordingly, according to court documents.

Smith, 41, retaliated by filing an injunction against Brown, which was granted. Brown cannot step foot on UGS property or make any decisions on behalf of the business.

Both attorneys gave lengthy opening arguments Monday afternoon before Judge Lisa Herndon. They spoke for nearly two hours before Herndon ordered the hearing be continued until this morning.

David Banker, who represents Brown, said Herndon could decide whether to dissolve the injunction against his client and have the two men work it out or accept a motion to appoint a third-party to take over UGS and have both men fairly compensated. Brown prefers the third-party option, his lawyer said.

“It’s the only way to go forward at this point,” Banker said. “The parties are in an intractable impasse.”

The judge also has the right to uphold the injunction, which would put Smith back in charge.

The deal signed in October seemed sweet to both parties. Brown had the licensing while Smith had the expertise in sinkhole repair.

Brown’s previously rosy outlook has since evaporated. He doesn’t want his license abused by someone he doesn’t trust while he’s relegated to the sidelines, Banker said.

In addition to the suspicious checks, Brown stated in court documents Smith had not paid rent for several months for the office space at 4002 Broad St.

“I needed to take possession of the Company office without warning to Mr. Smith and employees loyal to him in order to gain access to the financial information which Mr. Smith had been concealing from me, to stop his theft of corporate funds,” Brown wrote.

Additionally, he accused Smith of looting the business’ bank accounts for his own personal gain.

Smith’s attorney, Edward P. Jordan II, made allegations of his own during Monday’s hearing. He said Brown has been “bouncing checks all over town” during the past couple weeks.

Some of the employees who were escorted from the premises during Brown’s takeover said one of the people who assisted him that day had claimed to be an agent with the Florida Department of Law Enforcement.

A spokeswoman with FDLE said the agency was not investigating UGS.

The Hernando County Sheriff’s Office suspended its own case because attorneys have declared a civil matter.

Brown was scheduled to meet Thursday with economic crimes investigators, but he canceled.

“If Brown produces evidence that fraud and/or theft has occurred, I will initiate further investigation and re-classify this case,” wrote Detective William Horvath in a sheriff’s report.

On Friday, a fire engulfed 2.8 acres of UGS-owned property along U.S. 41 near Powell Road. The fire damaged a 32-foot trailer owned by Brown.

“Someone burned it up under Mr. Smith’s watch,” Banker said in court Monday.

A Florida Forest Service spokesman said the fire was accidental — likely caused from sparks from a welder.


Full article …here

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