CHARLESTON – A local public relations executive is being sued by his business partner.
R. Robert Samples filed a lawsuit against George Manahan on March 26 in Kanawha Circuit Court claiming Manahan is improperly trying to expel him from control of The Manahan Group, a prominent Charleston consulting firm.
Samples says he is an investor in a number of companies in the Kanawha Valley and has had a long association with Manahan.
His complaint says he put up 50 percent of the capital when Manahan and Brent Pauley started Manahan and Pauley LLC, a consulting and communications company, in September 2003. Samples said Manahan and Pauley each put up 25 percent.
In January 2005, Samples claims he and Manahan formed The Manahan Group and control the company through an operating agreement. Under the agreement, Manahan was to be paid a salary of $77,600 as the managing member, the complaint says.
The agreement further says that if Manahan get a raise, Samples would get an equal amount. Further distributions to Samples and Manahan would be split 50-50, the complaint says.
Subsequent to the formation of the company, Samples says he and Manahan purchased the building at 222 Capitol Street for the purposes of moving the company there.
Following the purchase of the building, Samples said they had problems attracting and maintaining tenants for the rest of the building. A restaurant that was located on the first floor of the building -– Cazon -- later vacated and filed for bankruptcy, the complaint says.
The overall state of the economy made it difficult to find other tenants, Samples claims.
The problems with 222 Capitol Street led to Manahan developing feelings of animosity towards Samples, his complaint says. In addition to the building, Samples says he disagreed with a loan Manahan allegedly made in 2007 to the president of Eimors Construction, of which Samples was a member.
According to the complaint, Aaron Wood, the president of the construction company, asked Manahan for a $50,000 loan through The Manahan Group in order to cover payroll. The construction company was involved in renovating 222 Capitol Street.
Wood allegedly promised to pay back the loan from the proceeds of a construction project, the complaint says.
But Samples claims Eimors never performed that construction project and eventually filed for bankruptcy and the loan was never repaid.
Samples claims it was around this time that Manahan began to try to end their business relationship "at as little cost to himself as possible."
On Dec. 28, 2007, Manahan gave Samples notice that he was being expelled from The Manahan Group under the terms of the operating agreement, the complaint says.
As grounds for the expulsion, Manahan accused Samples of "kiting" checks to a bank serving as a lender to The Manahan Group and failed to remit withholding taxes to the IRS.
Samples says the allegations are without merit and were meant to exert pressure on him to sell his interest in the company at a reduced price, because, at the same time, Manahan was attempting to purchase his interest.
Subsequent to this action by Manahan, Samples says he made an effort to "unwind" the business relationship. Samples claims he requested financial statements of The Manahan Group from 2004-2008.
On May 15, 2008, Manahan told Samples lawyer that he would not release the 2008 information unless Samples agreed that the information would not be applicable in the dispute over Samples' pending expulsion from the company, the complaint says.
Then, on July 3, 2008, Samples says Manahan ceased negotiations despite an arbitration provision in the operating agreement for The Manahan Group.
Samples says Manahan has continued to refuse to deal in good faith.
Samples is seeking a permanent injunction to stop his expulsion and for damages on his claims that Manahan breached the contract between them.
Harry Bell is representing Samples. The case is before Kanawha Circuit Judge James Stucky.
Kanawha Circuit Court case number: 09-C-543