Business & Economy

Poultney manufacturing company stockholders take ownership dispute to court

A family that owns half of a Vermont manufacturing company is suing the president of the company, who owns the other half, after he allegedly offered to sell his shares, then went back on his word.

Shares in the Poultney-based First Light Technologies, Inc. are split evenly between Kenneth Ell, the president of the company who runs day-to-day operations, the children of Mark Kurtz, one of the company’s directors, according to court papers.

In a lawsuit filed in federal court in Vermont last week, Vanessa, Matthew and Alexandra Kurtz allege that after Ell agreed to sell them his stake in the company earlier this year, he returned their money and never transferred them his 50% share of the company.

The Kurtz family alleges that Ell “failed, neglected and refused” to abide by the terms of a contract, and are seeking to have a judge order him to transfer them his shares.

First Light employs 60 people in Poultney, producing UVC lamps that are used to disinfect air and water systems. (The manufacturer, First Light, is not related to the telecommunications company, FirstLight.) 

The dispute began in January, when Ell sent an email to Mark Kurtz and his attorney requesting a meeting to discuss “potential options/offers regarding the sale of First Light” to a third party.

The Kurtzs’ attorney replied saying that “Mark and the shareholders (his children) very much agree that a meeting is required,” according to court documents.

In February, Ell and the Kurtz family met, according to the court documents, discussing a number of company matters, including possible governance and succession plans for the company. They note that the meeting was calm, and “at no time were any threats made by any participant nor were voices raised.”

At the meeting, Kurtz’s counsel agreed to prepare a written list of proposals to deal with some of the issues raised at the meeting, and send it to Ell. During the meeting, Ell never mentioned any plans for selling his shares to the Kurtz family, according to the documents.

But after Ell received the list of proposals, he sent an email to Kurtz’s attorney, saying that the proposal “helped make it crystal clear” to him how he wished to proceed.

“I wish to terminate my relationship with Mark Kurtz and the other shareholders,” he wrote. “If possible, I would like to do this as simple and painless as possible. As a starting point I offer the following: The current shareholders would buy my stock for a price of $1.5 million dollars (sic). I feel this is a very attractive price and will allow the shareholders to move forward as they see fit.”

A few days later, the Kurtz family accepted Ell’s offer unconditionally, and delivered a check for $1.5 million, according to the complaint. 

However, they allege in their suit that Ell failed to deliver them the shares. In May, Ell returned the check to an associate of Mark Kurtz.

In the months following the initial meeting, Ell has continued to act as the company’s president and manager, and draw a salary from First Light, according to the complaint, which the Kurtz family says diminishes the value of their stock ownership. 

The family’s lawsuit asks the court to require that Ell hand over his shares, declare the Kurtz family the legal owners of 100% of the company’s stock, and pay for their costs in the lawsuit.

Neither Ell nor the Kurtz’s lawyer responded to request for comment.

Want to stay on top of the latest business news? Sign up here to get a weekly email on all of VTDigger's reporting on local companies and economic trends. And check out our new Business section here.

 

Ellie French

About Ellie

Ellie French is a general assignment reporter and news assistant for VTDigger. She is a recent graduate of Boston University, where she interned for the Boston Business Journal and served as the editor-in-chief of The Daily Free Press, BU’s student newspaper. She is originally from Duluth, Minnesota.

Email: [email protected]

Send us your thoughts

VTDigger is now accepting letters to the editor. For information about our guidelines, and access to the letter form, please click here.

 

Recent Stories

Thanks for reporting an error with the story, "Poultney manufacturing company stockholders take ownership dispute to..."