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Friday, April 27, 2012

Scrap dealer denied additional assets

CONCORD – A local scrap metal dealer who sued developers Kevin Slattery and Bernie Plante after the trio’s brief partnership dissolved several years ago was denied the additional partnership assets he sought in the suit, according to a ruling handed down Thursday in Merrimack County Superior Court.

Justice Richard B. McNamara ruled that Ansel Grandmaison, who formed “Burch Street Steel LLC” with Slattery and Plante for the purpose of undertaking a large steel removal and reselling project in early 2006, is entitled to $143,500, considerably less than what Grandmaison claims is owed to him for the work he did and initial investment he made.

McNamara did rule that Slattery and Plante, who formed Edgebrook Heights LLC after breaking with Grandmaison, breached their fiduciary obligations to Burch Street and Grandmaison, which, McNamara wrote, accounts in large part for the amount awarded to Grandmaison.

According to the suit, Grandmaison was contacted by the Cisco company, which had purchased metal building materials for two structures it later decided not to build. Cisco told Grandmaison it wanted to sell the building components as scrap and have it removed. Grandmaison then contacted Slattery and Plante, according to the suit, pitching the idea of buying the components and re-selling them.

The three formed Burch Street, then signed an agreement with Cisco to remove the 1,400 tons of steel by March 15, 2006, according to the suit. Slattery and Plante, through a separate entity they own called Melton Associates, purchased the steel for $135,000. At the same time, Burch Street purchased two HVAC units for $75,000.

A major point of dispute, the suit states, is how the steel removal and transportation project was financed and carried out. Grandmaison never billed Burch Street, per the partners’ agreement, which left Grandmaison unable to quantify his expenses.

In April 2006, the partners reached a deal to sell the building components for $1.7 million, but it fell through. With no buyer in sight, according to the suit, Plante and Slattery approached Gutierrez Construction company to discuss a deal.

By that time, the suit states, Plante and Slattery had invested roughly $250,000, while Grandmaison had put in $90,000. Plante and Slattery claimed it was apparent to them that Grandmaison would be unable to finance his part of the partnership, so they attempted to buy him out or settle his debts. At one point, they offered Grandmaison $500,000 to give up his interest in the partnership, the suit states, but Grandmaison refused.

Ruling that most of Grandmaison’s claims are not supported by evidence, McNamara also cited the fact Grandmaison rebuffed a generous settlement offer and “failed to live up to his obligation to share equally in partnership expenses.” He also ruled Slattery and Plante did not act in bad faith by expelling Grandmaison from the partnership, especially given Grandmaison’s refusal to take the $500,000 offer.

Dean Shalhoup can be reached at 594-6443 or dshalhoup@nashuatelegraph.com.