Team Arthur S. has called Artie T. Demoulas’s bluff. “Sure”, they said, “We’ll sell out and take your offer Artie. Just write us a check and we’ll call it a day. What’s that? You want us to take a note? Hmm, none of the other bidders want is to do that. Okay. But we have to make sure we’re going to get paid. And based on past dealings you have bad credit with us.”
So Artie T (Larry Rasky) puts out a press release today saying press releases aren’t the way to negotiate and he doesn’t have the money to buy it so the other shareholders better sell on his terms which includes financing the deal or else suffer the consequences. Okay Artie you win the battle of p.r. firms right now but I think you have to come clean with the employees.
Artie T. doesn’t have the wherewithal to pull this off and Arthur S. knows it so he’s gonna let this play out so he can say they tried then sell to Hannaford’s German parent company. I don’t think the Germans will be as patient with these pestilent employees, do you? Let’s ask the Polish, see what they think.
—–
Marshall CJ
We turn now to the background of this case, whose factual complexity requires a lengthy summary.
1. Background. We draw our recitation of facts from those found by the special hearing officer and adopted by the board, reserving recitation of certain facts for later discussion, as appropriate, and noting discrepancies where they occur. See Matter of Hilson, 448 Mass. 603 , 604 (2007). We focus on the facts most relevant to the information filed against Curry. For further details of the findings of the special hearing officer, see Matter of Crossen, post 533 (2008) (Crossen).
a. Demoulas litigation. This bar disciplinary proceeding has its origins in the protracted legal warfare between the family of George Demoulas and the family of Telemachus Demoulas over interests in the family supermarket business. See Demoulas v. Demoulas, 432 Mass. 43 , 44 (2000) (recounting history of intrafamily litigation); Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501 , 504-509 (1997) (recounting substance of dispute). See also Demoulas v. Demoulas, 428 Mass. 555 (1998). Here we summarize only the most salient facts, beginning in 1990. By that time, Demoulas Super Markets, Inc. (DSM), and other entities jointly owned by the families of brothers George and Telemachus Demoulas were estimated to be worth approximately $1 billion. [Note 3] Two law suits filed in Superior Court in 1990 by
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George’s family [Note 4] against Telemachus and his family would eventually determine ownership and control of the bulk of the Demoulas fortune. The first lawsuit alleged that the Telemachus Demoulas defendants had fraudulently transferred stock from George’s family to themselves, and that Telemachus’s children had fraudulently received 400 shares of DSM stock belonging to George’s family (stock transfer case). The second suit, brought by Arthur S. Demoulas, George’s son, while the first case was pending, alleged that the Telemachus branch of the family had diverted corporate opportunities from DSM to entities the defendants separately controlled (shareholder derivative case). Superior Court Judge Maria Lopez presided over both cases.
The stock transfer case was tried before a jury. Judge Lopez directed verdicts for Telemachus’s children on certain counts. Subsequently, in May, 1994, the jury returned verdicts in favor of George’s family against Telemachus and his family for breach of duty related to the fraudulent transfer of stock and other interests belonging to the plaintiffs. Judge Lopez reserved the issue of damages.
The shareholder derivative case was tried before Judge Lopez without a jury from December 12, 1994, through May 15, 1995. Her decision was entered on August 3, 1995. Judge Lopez’s law clerk for the trial was then in his second year of clerkship for the Superior Court; he worked on the case from the fall of 1994 until the end of August, 1995, when his clerkship ended.
Both the stock transfer case and the shareholder derivative case took fateful turns in three decisions issued by Judge Lopez in August, 1995. First, as just noted, on August 3, 1995, judgment entered in the shareholder derivative case. Judge Lopez found that the defendants had improperly diverted corporate opportunities of DSM, and ordered the rescission of certain transactions, disgorgement of improperly obtained gains, and payment of attorney’s fees, all in favor of George’s family. The next day, on August, 4, 1995, Judge Lopez, responding to a request by the plaintiffs, vacated the directed verdict for Telemachus’s children that she had issued in the stock transfer case. Her new order directed that the disputed 400 shares of DSM stock be
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held in constructive trust by Telemachus’s children for members of George’s family. Finally, on August 29, 1995, Judge Lopez amended the judgment in the shareholder derivative case to provide, among other things, for the repayment to DSM of certain cash distributions and sale proceeds, the cancellation of all promissory notes issued by DSM to shareholders, the transfer of all assets and liabilities of DSM and affiliated real estate entities to an entity held equally by George’s and Telemachus’s families, and payment of the plaintiffs’ legal fees and expenses. [Note 5] We upheld that judgment in major part and remanded the case to the Superior Court for additional findings and the issuance of orders implementing relief. See Demoulas v. Demoulas, 428 Mass. 555 , 557-558, 591-592 (1998).
With our decision affirming Judge Lopez, it was settled that Telemachus’s branch of the family would lose much of their control of the Demoulas businesses and fortune. Not surprisingly, the Telemachus Demoulas defendants were alarmed at this prospect. They were disappointed in the group of attorneys and law firms to whom they had paid millions of dollars in legal fees, and they were convinced that Judge Lopez was biased against them. [Note 6] Their suspicions of Judge Lopez were heightened by some of these attorneys, who assured them that Judge Lopez was “too dumb” to have written the Demoulas decision.
We turn now to the events germane to this disciplinary proceeding. At the time of the conduct at issue in this matter, approximately August, 1995, through August, 1997, the Demoulas litigations were still ongoing. The dockets in the Superior Court reflect numerous motions and other proceedings, and there were ongoing proceedings in both the Appeals Court and this court for several years after the events that we shall describe. See, e.g., Demoulas v. Demoulas Super Mkts., Inc., 428 Mass. 543 (1998).
b. The initial meeting with the Demoulas family. In 1995,
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Curry was a member in good standing of the Massachusetts bar, having gained admission in 1968. Early in his career he spent five and one-half years as an assistant attorney general in the office of the Massachusetts Attorney General. Curry then entered private practice.
In August, 1995, approximately two weeks after Judge Lopez issued the Demoulas decision, Curry and Ernest Reid, a private investigator who had worked with Curry in the past, sent a letter to Telemachus proposing to meet with him concerning “a matter of importance and confidence.” [Note 7], [Note 8] As a result of this communication, Curry, Reid, and members of the Demoulas family, including Telemachus and his son, Arthur T. Demoulas (Arthur T.), met at DSM headquarters in Tewksbury in early September, 1995. [Note 9] Curry told his hosts what they were apparently eager to hear: Judge Lopez had decided the shareholder derivative case against them before opening statements in the case. Specifically, he told them, among other things, that the case was “over before it began.” He proceeded to make salacious and disparaging remarks about Judge Lopez’s character on and off the bench, and also about the character of the plaintiffs’ attorneys. Curry told Telemachus and the others that Judge Lopez had previously done “a big favor” for another individual
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in “a big case.” Curry told them that their case was “fixed.” However, at the time he made this presentation, Curry, in the words of the special hearing officer, “had no documentation to support any of his scurrilous charges.”
Curry’s aim was true. Telemachus was aghast that he had “been had.” He asked Curry what could be done. Curry informed Telemachus and the others that they would need evidence of what Curry described as Judge Lopez’s “prior corrupt acts” and “judicial misconduct” to take to this court and to the media. Curry volunteered himself and Reid to produce the evidence. [Note 10] A week after the meeting, Arthur T. asked Curry and Reid to investigate Judge Lopez. [Note 11] In the ensuing twelve months, Reid mined public records for information on the personal and professional lives of Judge Lopez and of the attorneys who had worked on the Demoulas cases for George’s family. In November, 1996, Curry reviewed Judge Lopez’s written decisions to that date in an effort to determine whether the judge had written the Demoulas decision. [Note 12]
In November, 1996, Arthur T. gave Curry a resume that the law clerk, with Judge Lopez’s permission, had sent to various Demoulas defense counsel in the fall of 1995 seeking employment. Reid and Curry deduced from the resume that the law clerk was interested in international commercial civil litigation. Together they decided to contact the law clerk under the guise of offering him lucrative employment in that field. In the words of the special hearing officer, they concocted the law clerk’s “dream job.”
c. Initial meetings with the law clerk. To further their plan, Reid gathered public documents relating to the law clerk, his neighbors, his parents, and their neighbors. In April 1997, Reid
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contacted the law clerk by telephone. Using his real name, Reid told the law clerk that he was a headhunter who wished to interview him about an “attractive opportunity” as an attorney at a law firm, at a salary of $90,000 per year. The law clerk was excited, [Note 13] and Reid set up a meeting in the law clerk’s home on April 9, 1997, to discuss the “opportunity.”
At their first meeting, Reid slightly changed course. He told the law clerk (falsely) that his client was a corporation with offices in Bermuda, New York, and Boston, and that the corporation was looking for in-house counsel. Using the pretext that his client demanded a candidate with excellent writing skills, Reid then asked him if he had worked on any “cases of note” while clerking for the Superior Court. The law clerk promptly replied, “[W]e wrote the Demoulas decision.” When asked to clarify, he said, “I wrote the decision.” He also told Reid that Judge Lopez had read, but not edited, the decision. A general discussion ensued about Judge Lopez, her husband, and her husband’s businesses. Reid left with a promise to be back in touch.
The next day, Reid met Curry in Forest Hills Cemetery, where they often met for confidential talks. Among other things, Reid recounted the law clerk’s remarks about authoring the Demoulas decision, and told Curry that the law clerk had sent him a copy of the decision. Curry then telephoned Arthur T. to report what he had learned from Reid.
On May 4, 1997, Reid called the law clerk to tell him that the “client” was impressed with the writing samples, especially the Demoulas decision. Reid arranged another interview for May 7, 1997. At the second meeting, Reid again emphasized the lucrative and adventurous aspects of the fake in-house position and probed more deeply into the authorship of the Demoulas decision. Among other things, the law clerk claimed that, although he discussed the case with Judge Lopez during the lengthy trial, the legal conclusions were his. When Reid asked if the case were rightly decided, the law clerk replied, “The
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[Supreme Judicial Court] upheld me so what does it matter.” Reid said the client would like to meet him either in New York or in Halifax, Nova Scotia, to which the law clerk agreed.
d. The first sham interview (Halifax). Reid subsequently reported to Curry that he did not have the “right vibes” from the law clerk at the second meeting and could not get what he “wanted” from him. The two decided on a third meeting with the law clerk, this time in Halifax, Nova Scotia. The special hearing officer did not credit Curry’s testimony that Halifax was chosen because it was a place Reid had always wanted to visit. She concluded that Halifax was chosen because, unlike Massachusetts, Nova Scotia is a jurisdiction in which recording a conversation is legal so long as one party consents to the tape recording.
The preparations for the Halifax interview were substantial. The plan was for Curry to present himself to the law clerk as “Kevin Concave,” an employee of a fictitious British Pacific Surplus Risks, Ltd. (British Pacific), an “international insurance underwriting business.” Richard LaBonte, a private detective recommended by Reid, would also be present at the Halifax interview. [Note 14] LaBonte was to pose as “Richard LaBlanc,” another British Pacific employee. Reid and Curry arranged for business cards to be printed with the aliases of Curry and LaBonte. The business cards listed an address for British Pacific that was an actual address in London, a working facsimile number, and a telephone number that was answered by a person with an English accent when the law clerk called, as he later did. Curry and the two investigators also discussed whether the meeting with the law clerk should be tape recorded. The special hearing officer found that a decision not to tape record the interview was made during a telephone conference among the three in Halifax prior to the interview. [Note 15]
Reid provided LaBonte with extensive documentation concerning
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the law clerk. He scripted a set of interview questions. Some time before June 5, 1997, Curry gave Reid a round-trip airline ticket to Halifax and $300 in cash, both of which Reid passed on to the law clerk. The money was allegedly to compensate the law clerk for missing a day’s work. [Note 16]
On June 5, 1997, the law clerk flew to Halifax. At a meeting room in the Citadel Hotel, he met “Kevin Concave” (Curry), who was introduced as the director of operations at British Pacific, and “Richard LaBlanc” (LaBonte), “the person who put out fires” for the company. As the interview progressed from introductory generalities to specifics about the supposed job, the law clerk began to stutter. “Concave” told the law clerk that they knew he stuttered, and reassured him that they were interested primarily in his writing skills. When he asked how they knew he stuttered, Curry produced a recommendation letter mentioning his stutter that had been written by attorney Stephen Mulcahy in support of the law clerk’s application for admission to the Massachusetts bar. The law clerk then volunteered that he did not personally know Mulcahy, but that Mulcahy had written the required recommendation letter as a favor to a mutual acquaintance, another attorney, who was unable to submit a letter. [Note 17] The information about the bar recommendation letter was news to Curry and LaBonte.
The interview then proceeded with Curry spinning tales about the worldwide reach of British Pacific and the “adventures” the law clerk would have around the world in his work for the company. He told the law clerk that he would be paid in excess of $90,000 per year, in part to compensate him and his wife for lengthy stays they would be required to make in different countries. Then followed a series of questions by Curry and
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LaBonte that was, in the words of the special hearing officer, “unquestionably designed to inquire into . . . Judge Lopez’s deliberative process in the Demoulas decision, as well as to elicit potentially damaging personal information about her.” Curry emphasized that writing skills were extremely important for the job. He told the law clerk, falsely, that attorney Robert Shaw was British Pacific’s outside counsel, who had reviewed the Demoulas decision and was very impressed. [Note 18] Curry then asked how the law clerk could have written the entire decision, as he claimed. According to the testimony of Curry and LaBonte, the law clerk told them that Judge Lopez was biased and predisposed to find for the plaintiffs, and that she had told him before the trial started who “the good guys and the bad guys” were, and who the “winner and losers” were going to be. Curry and LaBonte also testified that the law clerk made negative comments about Judge Lopez’s work habits and deliberately downplayed her contributions to the decision. The law clerk, in turn, testified that he had not made the statements attributed to him about Judge Lopez’s predisposition in the Demoulas case. The special hearing officer, who credited most of the law clerk’s testimony, did not credit his testimony on this issue. She concluded that he had indeed made statements to LaBonte and Curry about Judge Lopez’s alleged predisposition against the Telemachus Demoulas defendants. She also concluded that Curry exaggerated and misrepresented the nature of the law clerk’s statements about Judge Lopez, both to Arthur T. and in this bar discipline proceeding.
Curry and LaBonte concluded the sham interview by asking a series of questions about the law clerk’s personal life, among them, his wife’s ancestry and the extent of her college and law school debt; the occupations of his parents, brothers, and sisters; and whether he had ever done anything illegal or had any “skeletons in [his] closet.” These questions, the special hearing officer found, were designed to elicit “compromising information” to use against the law clerk.
e. The aftermath of the Halifax sham interview. Back in
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Boston, Curry relayed to Arthur T., “I think we got him.” On June 8, 1997, Arthur T., in turn, told Gary Crossen, one of the Telemachus Demoulas family defense counsel, about Curry and Reid and the Halifax sham. See Crossen, supra at 538-539. Crossen was unimpressed with the report that the law clerk claimed to have written the entire Demoulas decision. However, he believed that the information that Judge Lopez had prejudged the case to be both “troubling” and “significant.” See id.
The same day he met with Crossen, Arthur T. also met with Curry to suggest that Crossen draft Curry’s affidavit about the interview. Curry took offense at this suggestion and drafted his own affidavit. In his statement, Curry swore that the law clerk had declared four times during the course of the interview that Judge Lopez was “predisposed to find for the Plaintiffs,” and that she had told him who the “bad guys and the good guys were” and who the “winners were going to be before the case began.” Curry also averred that the law clerk claimed to have written the entire Demoulas decision, and that his bar application contained a letter of recommendation from an attorney who did not know him. [Note 19] Curry signed, but did not date, the affidavit, which he gave to Crossen.
LaBonte also drafted an affidavit, with the help of his own counsel. LaBonte’s affidavit indicates that the law clerk claimed “[o]n several occasions . . . that Judge Lopez was predisposed to find for the Plaintiff[s]” and that “before the start of the Trial . . . Judge Lopez told [the law clerk] that he will easily tell who was lying and that the Plaintiff[s’] physical evidence will be overwhelming.” LaBonte signed and dated the affidavit and transmitted it by facsimile to Curry the next day. [Note 20]
On June 9, 1997, Curry met in Crossen’s office with Arthur
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T. and Richard K. Donahue, another member of the defense team. [Note 21] The men discussed how best to make use of what Crossen considered the most important information from the Halifax sham interview, the information concerning Judge Lopez’s alleged predisposition. Among other options, they considered filing the affidavits with the Commission on Judicial Conduct and verifying or further pursuing the Halifax information by continuing the ruse in New York or Bermuda, both one-party consent jurisdictions in which they might secretly tape record the law clerk’s comments.
On or about June 11, 1997, Crossen determined that the best course of action would be to verify the Halifax information using his own investigators. See Crossen, supra at 539-540. He concluded that the best way to do this was to continue the job ruse and secretly tape record the law clerk’s statements in New York. At a subsequent planning meeting for the New York “interview” attended by Crossen, three of his investigators, and Arthur T., Curry spoke about how the second interview should be conducted based on Curry’s experiences with the law clerk.
The group ultimately decided that the law clerk would be told that the New York interview would be with a “decision maker” at British Pacific, a “Peter O’Hara.” O’Hara’s role was to be played by Peter Rush, a private investigator who previously had worked as a United States Secret Service special agent-in-charge in Boston. The planning group, which included Curry, also decided that LaBonte, whom the law clerk knew as “Richard LaBlanc” of British Pacific, should be present at the interview, and that Crossen and Stewart Henry, a private investigator, would go to New York to “monitor” the situation. We discuss the details of the New York interview in Crossen, supra at 542-545. Here it is sufficient to note that Curry was a
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reluctant supporter of the New York plan, arguing instead that his and LaBonte’s affidavits were sufficient to proceed with action to have Judge Lopez removed from the case.
On the day of the interview, June 17, 1997, Curry arrived unexpectedly at the New York hotel suite where the interview was to take place to reiterate his opposition to the plan. Crossen disagreed. Curry remained at the hotel suite for approximately fifteen minutes, during which time he made a call from his cellular telephone and was heard to say, “Everything looks okay to me. It’s all set. . . . Anything else you want . . . . Okay. I’m out of here.” [Note 22] He was not present for the interview. Curry’s fear of being displaced by the defendants’ regular counsel had come to pass. For purposes of this bar disciplinary proceeding, his role in the law clerk matter was over.
SomervilleTom says
I find the tired national stereotyping of Germany insulting. Is this another case where different rules apply to EB3?
Yet another rehash of DeMoulas ancient history? I’d sooner read any of the many entertaining genealogies of the Hebrew Scriptures, like this one from 1 Chronicles:
JimC says
Arthur T. might also be stalling, hoping for an “angel” investor.
kirth says
It’s wherewithal.
I have no idea what “wear with all” means, unless you’re talking about hats or scarves or something, which I don’t think you are.
I still think AT should be pursuing that woman in London for her 4%.
JimC says
Maybe he should marry her and live happily ever after.
Oh wait, they’re not related, are they? If so I’ll retract that suggestion.
eb3-fka-ernie-boch-iii says
change made.
fenway49 says
As I gather from the post, this term denotes the perfect accessory. Apparently these lawyers fell short.
mjm238 says
Hannaford’s parent company Delhaize is Belgian. My Belgian mother would turn over in her grave to hear the two countries equated.
eb3-fka-ernie-boch-iii says
Hmmm, Could of sworn I read they were German.
What’s worse I have nothing on the Belgium’s. If they were French, well there’s a good 15 minutes of material right there.
Can anyone out there help with me with Belgium stereotypes?
Thanks.
eb3-fka-ernie-boch-iii says
Belgiums shows up incorrect.
Christopher says
…and the plural of that is Belgians. Though I suppose the literal answer to your question might be Belgia, if you decline Belgium as a Latin word in the second declention, neuter i-stem branch:)
eb3-fka-ernie-boch-iii says
thanks
JimC says
Frequently mistaken for French.
davemb says
Monty Python had a game show where one of the competitions was to find a derogatory term for the Belgians. #3 was “Sprouts”, #2 was “Phlegms”, and the winner was “Miserable Fat Belgian Bastards”.
And of course Austin Powers’ father did not like the Belgians because they share a border with the Dutch…
jconway says
During the World Cup, I went out of my way to find obscure historical references to mock various team rivalries. When we played the Belgians, I said:
‘Let the US beat these mayo on fries eating, Congo pillaging, glorified buffer state occupying bastards once and for all!’.
Also their main ethnic groups, the Flems and the Walloons, are rather comically named, and rabidly hate each other.
I largely agree with the Economist, who asked, if Belgium did not exist nowadays, would anyone take the trouble to invent it?
mjm238 says
“Pomme Frites” cooked in lard and dipped in the gravy from whatever high fat meat dish they were being served with. And my Belgian relatives lived to ripe old ages.
You article is from 2007. From 2010 to 2011 they went even longer without a central government and were quite proud of it.
Christopher says
I actually took a liking to the mayo on fries combination.
johnk says
So Arthur T. is paying pre-crisis value, so who else would do that? It’s looking more like Arthur S. is backed into a wall, and his only way out if to offer terms that he knows will not be accepted. Kind of like the Red Sox 4 years/70 million deal to Lester. They say they couldn’t make the deal and sell for less to Hannaford. Interesting ploy, but something that Arthur T. could easily file suit against. This Arthur S guy is a real dip****, but will the others let him walk away from millions to sell elsewhere is the question.
mannygoldstein says
Who wants to step into that mess? Big companies pay top-dollar for certainty – and this situation has extreme uncertainty unless ATD is CEO, which won’t likely happen unless he’s the buyer.
It’s also reasonably likely that a) ATD can’t get financing because bankers are also highly risk-averse in these types of transactions, and/or b) ATD knows that no other party will pay much or anything for the business, and he’s putting the ASD posse’s feet to the fire, forcing them to sweeten the terms.
I have a sneaking suspicion that ATD knew this day was coming, and has been preparing the battleground for years.