Leadership

Judge Dismisses Case Aiming For Access To Internal PulteGroup Records

The plaintiff's legal team, the Miller Law Firm, P.C., has indicated – via a press statement – it may re-file the lawsuit after Trester squares away registration paperwork to qualify as a "shareholder of record."

Leadership

Judge Dismisses Case Aiming For Access To Internal PulteGroup Records

The plaintiff's legal team, the Miller Law Firm, P.C., has indicated – via a press statement – it may re-file the lawsuit after Trester squares away registration paperwork to qualify as a "shareholder of record."

June 29th, 2023
Judge Dismisses Case Aiming For Access To Internal PulteGroup Records
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A Michigan judge this week dismissed a case brought by an individual claiming rights as a PulteGroup shareholder to gain access to confidential company records regarding its 2022 termination of senior-level executive Brandon Jones for breaking the company's personal conduct code.

According to a confirmed Law360 report:

A woman who bought stock in PulteGroup Inc. through a digital payment app can't get access to a King & Spalding LLP report on the alleged misconduct of a fired senior company executive because she isn't a "shareholder of record" entitled to the company's books, a Michigan judge ruled Wednesday.
Ruling from the bench, Ingham County Circuit Judge Joyce Draganchuk said she "couldn't ignore" the fact that the Michigan state law outlining a shareholder's right to inspect books and records uses the term "shareholder of record," instead of just "shareholder."
Plaintiff Betty Trester, who purchased shares in PulteGroup through the peer-to-peer payment platform Cash App, wasn't a shareholder of record because her ownership of the shares was never registered with the company, the judge found.

Earlier this month, The Builder's Daily reported that PulteGroup submitted arguments that the court disqualify the Trester case on several grounds, suggesting in its filings that Trester may have initiated her legal complaint against the company in alignment and support of Pulte-founder Bill Pulte's grandson William, who has been at odds with the firm's executive leadership since the time of the Brandon Jones termination.

The judge's dismissal of the case focused, as the Law360 report notes, on only the first of several grounds PulteGroup spelled out as reasons for throwing out the case. The PulteGroup legal team successfully contested Trester's claim as a PulteGroup "shareholder of record" based on citations the team provided.

The plaintiff's legal team, the Miller Law Firm, P.C., has indicated – via a press statement – it may re-file the lawsuit after Trester squares away registration paperwork to qualify as a "shareholder of record."

The press statement notes

A ruling earlier today by the Ingham County Circuit Court found that in order for Ms. Trester to have legal standing to inspect the Company's books and records, she must first file additional paperwork registering her stock with PulteGroup, in accordance with the Court's interpretation of Michigan law.
Ms. Trester, who intends to file the stock registration paperwork as soon as possible in order to continue a quest for shareholder transparency ...

It is not clear whether Judge Draganchuk would support the suit moving forward if and when Trester resolves the matter of her shareholder of record standing. In our prior account, we reported that PulteGroup legal team Dykema Gossett PLLC filed a 77-page argument for dismissal, on the "shareholder of record" issue and four others specific areas to address.

  • Questions as to whether Trester meets legal requirements as a "shareholder of record."
  • Argument that the Trester case fails in its statement of its reason for demanding access to privileged company information, instead basing its demand on unproven, speculated wrongdoing. In other words, the law bars "fishing expeditions" based on hearsay and unsupported suspicion.
  • Given questions about both Trester's standing as a shareholder and the origin and purpose of her complaint relative, PulteGroup asks the judge, at a minimum for time for "discovery" to sort out conflicting "factual" assertions.
  • If the judge does not agree to dismiss the case based on the motion, PulteGroup notes that the stated demand for access to records far overreaches the scope of the complaint as it relates to the termination of former PulteGroup Senior VP for field operations, Brandon Jones due to his violation of company code of conduct and ethics policy.
  • Lastly, the PulteGroup motion requested a denial of attorney's fee assignment to the firm in light of its evidenced willingness to work in good-faith with the plaintiff when the matter first arose.

The A PulteGroup media representative – in response to a request for comment following case's dismissal this week – says:

We are extremely pleased with the court’s dismissal of this case and believe this decision sends a strong message that it is improper to manipulate legitimate statutes to advance the personal grudge of a third party under the guise of being a shareholder advocate. As we argued in our brief, we believe that Bill Pulte, a former Board member and grandson of our founder, may have funded this lawsuit as part of his ongoing campaign against the company and its management team."

It looks, sounds, and feels very much as if this is not the last we'll be hearing of these matters.

ABOUT THE AUTHOR

John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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