Morgan et al v. The Antioch Company Litigation Trust Company

Filing 202

ORDER DENYING DEFENDANT MARTY MORAN'S MOTION FOR SUMMARY JUDGMENT (Doc. 143 ). Signed by Judge Timothy S. Black on 8/2/2013. (mr1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

THE ANTIOCH COMPANY
LITIGATION TRUST,
W. TIMOTHY MILLER, TRUSTEE,
Plaintiff,
vs.
LEE MORGAN, et al.,
Defendants.

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Case No. 3:10-cv-156

Judge Timothy S. Black

ORDER DENYING DEFENDANT MARTY MORAN’S
MOTION FOR SUMMARY JUDGMENT (Doc. 143)
This civil action is before the Court on Defendant Marty Moran’s motion for
summary judgment (Doc. 143) and the parties’ responsive memoranda (Docs. 167, 189).
I.

BACKGROUND FACTS 1

Defendant Marty Moran moves for summary judgment on Plaintiff’s tortious
interference with contract claim regarding a 2007 contract between the Antioch Company
(“Antioch”) and its financial advisor and investment banker Houlihan Lokey Howard &
Zukin (“Houlihan”). Marty Moran is Asha Morgan Moran’s spouse. (Doc. 111 at 1516). Asha Morgan Moran was both a board member and CEO at Antioch. (Id.) Her
father, Lee Morgan, is Antioch’s former CEO. (Doc. 90 at 16). Although Marty Moran
has never worked for Antioch nor acted as a board member of the company, his

1

A full factual background is available at Doc. 6, Section III.

management consulting company, Clear Path, has been retained by Antioch to perform “a
number of different projects.” (Doc. 111 at 16).
Defendant argues that his motion for summary judgment should be granted for two
reasons. First, Defendant claims that the evidence shows that the contract between
Antioch and Houlihan was never breached, and thus Plaintiff cannot claim tortious
interference with contract, as breach is one of the elements of the claim. (Doc. 143 at 46). Second, Defendant argues that there is no evidence to support Plaintiff’s contention
that Marty Moran interfered with the contract between Antioch and Houlihan. (Id. at 67). Moreover, Defendant maintains that summary judgment is proper because Plaintiff’s
tortious interference with contract claim is actually an aiding and abetting claim, which
Ohio law does not recognize. (Doc. 189 at 2-5).
Plaintiff responds that summary judgment is inappropriate because there are
genuine issues of material fact as to at least three matters: (1) whether the contract
between Antioch and Houlihan was breached; (2) whether Marty Moran intentionally
interfered with Houlihan’s attempts to secure potential purchasers for Antioch; and
(3) the extent of Antioch’s damages caused by Moran’s actions. (Doc. 167 at 12-13).
The relevant portion of the Trust’s amended complaint, Count Ten, “Tortious
Interference with Business Contracts with Respect to the Sale Process (Defendants Lee
and Marty Moran)”, reads:
214. Antioch entered into a contract with Houlihan in 2007 to explore a sale or
restructuring of the Company.
215. Defendants Lee and Marty Moran knew or reasonably should have known of
Antioch’s contract with Houlihan.
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216. Defendants Lee’s and Marty Moran’s conduct in engaging Candlewood and in
disrupting Houlihan’s efforts to identify a purchaser for Antioch interfered with
that contract.
217. Defendants Lee and Marty Moran knew or reasonably should have known that
their conduct interfered with that contract, causing Antioch to suffer damages.
218. Defendants Lee and Marty Moran acted with ill will.
219. Defendants Lee and Marty Moran acted with a conscious disregard for the rights
of others and with knowledge that their conduct would cause substantial harm.
220. Defendants Lee and Marty Moran were not justified in their conduct.
221. As a result, Defendants Lee and Marty Moran caused Antioch to suffer damages.
(Doc. 275 at 47-48).
II.

UNDISPUTED FACTS 2

1. In early 2007 the Antioch Company’s Board of Directors decided to pursue a
transaction whereby the Company would either be sold or recapitalized (the
“Sale Process”). The Antioch Board established a Special Transaction
Committee of the Board, and hired Houlihan Lokey Howard & Zukin as the
Board’s financial advisor and investment banker to pursue this goal. (Ex. 208,
(the “Houlihan Contract”); Blair Dep. 123:5-125:10, 127:11-128:2; Spencer
Dep. 31:17-32:1). It is the contract between Houlihan Lokey and the Company
that is the subject of Plaintiff’s tortious interference claim against Mr. Moran.
(See Ad. Pro. Doc. 272 (Amended Complaint) at ¶¶ 213-221)). 3
2. The Houlihan Contract generally required the Company to compensate
Houlihan Lokey to promote a potential transaction in the marketplace, and to
assist the Committee’s evaluation of any potential sale or recapitalization
proposal Houlihan could find (or any proposal brought to the Committee

2

See Docs. 144 and 168.

3

The Trust admits to the above facts, but adds that the Special Transaction Committee initially
included Lee Morgan and Asha Morgan Moran and other directors who had conflicts due to
holding subordinated notes and warrants.
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independent of Houlihan Lokey’s effort). (Houlihan Contract, Ex. 208 at
MWE-0096869; Blair Dep. at 124:5-125:10). 4
3. The record developed in discovery is devoid of evidence that either party to the
Houlihan Contract failed to perform their contractual duties. In fact, Nancy
Blair, the chair of the Special Transaction Committee, and Steven Spencer,
Houlihan’s lead on the Antioch engagement, both testified that the Company
and Houlihan performed their duties under the Houlihan Contract. (Spencer
Dep. at 267:5-25; Blair Dep. at 618:25-619:9, 625:22-626:2). Moreover, rather
than accuse each other of a breach or pursue a claim, the parties amended the
Houlihan Contract on January 25, 2008. (Ex. 208; Spencer Dep. at 122:21123:22). 5
4. Plaintiff was deputized under Antioch’s Plan of Reorganization to investigate
and prosecute the Company’s pre-petition causes of action. The Litigation
Trustee’s investigation led him to sue Houlihan Lokey in this case, but for
aiding and abetting purported breaches of fiduciary duty only (Counts Two and
Seven). Plaintiff did not assert a breach of contract claim against Houlihan
Lokey.
5. To assist him [Lee Morgan] with [participating in a transaction with the
Company], he engaged Candlewood Partners and its principal Glenn Pollack to
serve as his investment advisor. (See Candlewood Engagement Letter, Ex. 232
4

The Trust admits to the above facts, but clarifies that the Company agreed that Houlihan would
be its exclusive representative for the Sale Process, that it would not initiate discussions
regarding a transaction other than through Houlihan, and that in addition to retainer fees,
Houlihan’s compensation was tied directly to its ability to bring to the Company a transaction
that was approved by the Special Committee. (Dep. Ex. 208). Following the contractual
amendment, Houlihan would not receive a success fee for proposals developed by any other
party that left the Morgan family in control of the Company. (Id.)
5

The Trust admits that Houlihan made efforts to perform under the terms of the contract but that
those efforts were impeded and interfered with by the intentional actions of Marty Moran and
Lee Morgan. The Trust states further that it was Lee Morgan, in his role as CEO, who led the
Company to breach the exclusive contract with Houlihan by hiring Candlewood, having
Candlewood and Marty act on behalf of the Company in marketing it to potential investors, and
by using leverage over the Special Committee to pressure it into paying Candlewood’s fees. The
Trust admits that the Houlihan Contract was amended on January 25, 2008, something Houlihan
only agreed to because of its (correct) belief that Candlewood and the Morgans would not be
able to put together a viable deal for the Company. The Company abandoned its efforts to
perform under the agreement with Houlihan after Lee Morgan and the ESOP trustee replaced the
Board of Directors in June, 2008. (Spencer Dep. at 22-24).
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(“Investor” under the Agreement defined as “Lee Morgan”); Lee Morgan Dep.
336:8-337:10; Nancy Blair Dep. 150:14-25; Pollack Dep. 95:4-23). With
Candlewood’s assistance, Mr. Morgan (or entities in which he had an interest)
presented the Special Transaction Committee with several proposals to buy or
recapitalize the Company during the Sale Process. (Pollack Dep. 70:22-71:16;
1-3:15-23). Houlihan Lokey participated in the Special Transaction
Committee’s evaluation of the Candlewood proposals. (Spencer Dep. 284:1116). 6
6. Marty Moran had no contractual or other commercial relationship with
Candlewood, nor did he have any ownership or other interest in Candlewood.
(Moran Dep. 20:14-24). 7
7. Marty Moran is Mr. Morgan’s son-in-law with an MBA from Northwestern
University’s Kellogg School of Management. He occasionally provided
informal investment advice to Mr. Morgan. Mr. Moran has never been an
employee, officer, or director of the Antioch Company. (Moran Dep. at 16:711). He had no power to control any of the Company’s decisions. 8 (Id.)
8. Of the dozens of witnesses deposed in this case, many had never even met him
[Marty Moran] and certainly not one could identify any conduct by Mr. Moran
that any witness thought was wrongful or that in some way harmed the
Company. 9
6

The Trust admits to the above facts, adding that Lee Morgan presented the Special Committee
with a number of unworkable proposals to buy or recapitalize the Company, all of which lacked
committed financing and several of which would have left the Company in even deeper financial
ruin. (Dep. Ex. 255; 257; Dep. Ex. 353; Dep. Ex. 344). The Trust Admits that Houlihan advised
the Special Committee on the serious deficiencies in the Morgan proposals. ( Id.)
7

The Trust admits to the above facts, also stating that Marty Moran worked closely with
Candlewood to put together proposals to buy or recapitalize the Company on behalf of the
Morgan family. (Dep. Ex. 333; Dep. Ex. 322; Dep. Ex. 273; Dep. Ex. 326; Dep. Ex. 328; Dep.
Ex. 329). The Trust further states that Marty Moran had an ownership interest in MAMAMO,
LLC. (Marty Moran Dep. 27:7-12).
8

The Trust admits to the above facts, but clarifies that Marty Moran worked with and advised
others at the Company, including Karen Felix, and his wife, Asha Morgan Moran, a board
member, President of Creative Memories, and eventual CEO of the Company. (Dep. Ex. 203,
Dep. Ex. 243). Marty Moran provided advice to Lee Morgan informally and also completed
work for the Company through his company, Clear Path, LLC, unrelated to the Sale Process.
(Marty Moran Dep. 14-17).
9

The Trust admits to the above facts, adding that many of [the] witnesses were defendants in this
case and offered self-serving testimony.
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III.

STANDARD OF REVIEW

A motion for summary judgment should be granted if the evidence submitted to
the Court demonstrates that there is no genuine issue as to any material fact, and that the
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). See Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247-48 (1986). The moving party has the burden of showing the absence of genuine
disputes concerning material facts. Celotex, 477 U.S. at 323. Genuine issues of material
fact exist when there are “disputes over facts that might affect the outcome of the suit
under the governing law.” Anderson, 477 U.S. at 248. All facts and inferences must be
construed in the light most favorable to the party opposing the motion. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
A party opposing a motion for summary judgment “may not rest upon the mere
allegations or denials of his pleading, but . . . must set forth specific facts showing that
there is a genuine issue for trial.” Anderson, 477 U.S. at 248. The court reviewing a
motion for summary judgment “must not make credibility determinations, weigh the
respective value of evidence, or resolve material factual disputes.” Alman v. Reed, 703
F.3d 887, 895 (6th Cir. 2013).
IV.

ANALYSIS

Plaintiff’s tortious interference with contract claim arises when “one who, without
a privilege to do so, induces or otherwise purposely causes a third party not to enter into,
or continue, a business relationship with another, or perform a contract with another.”
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Dougherty v. Parsec, Inc., 872 F.2d 766, 769 (6th Cir. 1989) (internal citations omitted).
The claim must satisfy the following five elements: “(1) the existence of a contract,
(2) the wrongdoer’s knowledge of a contract, (3) the wrongdoer’s intentional
procurement of the contract’s breach, (4) lack of justification, and (5) resulting damages.”
Kenty v. Transamerica Premium Ins. Co., 650 N.E. 2d 863, 866 (Ohio 1995).
The Court notes that Defendant is correct in highlighting that Ohio does not have a
cause of action for “aiding and abetting” a claim for tortious interference with a contract.
(Doc. 189 at 2). In support of this argument, Defendant cites DeVries Dairy, L.L.C. v.
White Eagle Cooperative Ass’n, Inc., 974 N.E.2d 1194, 1194 (Ohio 2012): “[D]oes Ohio
law recognize a cause of action for tortious acts in concert under the Restatement (2d) of
Torts § 876? . . . . The certified question is answered in the negative.” Thus, the Court
must evaluate Marty Moran’s conduct independently from that of Lee Morgan or
Candlewood to determine whether Marty Moran’s motion for summary judgment should
be granted. That is, the Court must examine whether Marty Moran’s conduct by itself
was wrongful, and/or whether there are material facts in dispute on this issue.
It is undisputed that both the first and second elements of the claim are met in the
instant situation. In early 2007, Antioch’s Board of Directors formed a Special
Transaction Committee and hired Houlihan to act as the company’s financial advisor and
investment banker. (Doc. 144 at 1; Doc. 168 at 10). These simultaneous steps were
designed to assist Antioch in its efforts to either sell or recapitalize the Company. (Id.)
Additionally, Moran’s knowledge of the contract between Antioch and Houlihan is not

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disputed. In his deposition, Moran explained that his “understanding was that Houlihan
Lokey was engaged [by Antioch] to sell the company.” (Doc. 111 at 7).
To successfully oppose Defendant’s motion for summary judgment, Plaintiff must
make a “showing sufficient to establish the existence of [any] element essential to [its]
case, and on which [it] will bear the burden of proof at trial.” Celotex, 477 U.S. at 323.
Thus, the Court will consider the remaining three elements of the claim to determine if
there are genuine issues of material fact.
A. Wrongdoer’s Intentional Procurement of the Contract’s Breach
Defendant maintains that summary judgment must be granted because Plaintiff is
unable to demonstrate that the contract between Antioch and Houlihan was breached.
(Doc. 143 at 4). The undisputed facts show that after Antioch contracted with Houlihan
in March 2007, Lee Morgan hired Candlewood in August 2007 to act as an additional
financial advisor. (Doc. 90 at 118; Doc. 145-8 at 4). Candlewood’s engagement with
Morgan outlined that “Candlewood shall serve as financial advisor to Investor [Lee
Morgan] in connection with the issues and options concerning a potential recapitalization
or acquisition of The Antioch Company.” (Doc. 145-8 at 4). Lee Morgan testified that
he decided to hire Candlewood because of his concerns that “[a]s the conventional sales
process began to look like it was not going to work, I felt we had to explore alternative
models, refinancing, whatever.” (Doc. 90 at 118).
After Lee Morgan hired Candlewood, Antioch and Houlihan amended various
terms of the Houlihan contract. (Doc. 145-3 at 2). The parties revised the terms of their
engagement provision, but retained the language identifying “Houlihan Lokey as its
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exclusive financial advisor to provide financial advisory and investment banking services
in connection with a possible Transaction.” (Id.) The parties chose not to alter a section
of that same provision that delineates that “[t]he Company agrees that none of it, its
controlling equity holders or other affiliates, or its management will initiate any
discussions regarding a Transaction during the term of this Agreement, except through
Houlihan Lokey or except as provided in Section 8 of this Agreement.” (Id. at 8).
Finally, the parties amended the definition of “Transaction” to encompass the
“refinancing of a material portion of the Company’s outstanding indebtedness in a
transaction in which Houlihan Lokey . . . participated in the structuring, negotiation of
terms, and/or implementation of such refinancing or provided significant services with
respect to such refinancing.” (Id. at 3). Stephen Spencer, a Houlihan employee, testified
that this provision was designed to “also have Houlihan Lokey compensated if . . .
working in collaboration with Glenn [Candlewood], we were able to accomplish a
recapitalization or alternative transaction.” (Doc. 138 at 123). Defendant claims that the
very fact that Antioch and Houlihan amended the terms of their contract after Lee
Morgan hired Candlewood demonstrates that neither party believed that contracting with
Candlewood violated the exclusivity provision. (Doc. 143 at 2).
Defendant also points to the deposition of Timothy Miller, the Litigation Trustee,
who testified that he did not “recall seeing any documents” that showed that Houlihan
believed that Antioch breached the exclusivity provision of the contract by retaining
Candlewood. (Doc. 88 at 16). Moreover, Defendant emphasizes that Antioch is the only

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party that could have violated the exclusivity provision, and thus only Houlihan may
come forth with a claim for breach, not Moran. (Doc. 143 at 7).
Plaintiff counters Defendant’s claims by maintaining that Moran’s own
involvement with Candlewood led to a breach of Houlihan’s exclusivity provision with
Antioch. (Doc. 167 at 16). Moran participated in the preliminary interviews in hiring
Candlewood and in the negotiations surrounding the agreement between Lee Morgan and
Candlewood. (Doc. 111 at 48; Doc. 169-5 at 2). Glenn Pollack, the managing director of
Candlewood, also e-mailed Moran directly with a draft of Candlewood’s Engagement
Letter, to which Moran replied that he would review it and pass it along to the Morgan
family. (Doc. 170-17). In his deposition, Moran testified as to his role in relation to
Candlewood:
Q. From a 50,000-foot view can you describe the nature of any involvement that
you had in the process?
A. I worked on behalf of the Morgan family and worked with Candlewood to
restructure the debt, to look for options to restructure the debt.
Q. Were you engaged by Lee Morgan, paid to provide any services?
A. No.
Q. You were just providing a little bit of your thoughts just because you were
related to Asha and Lee?
A. Yes.
Q. Okay. Can you describe very generally the nature of any advice that you may
have provided to Mr. Morgan or to your wife, Ms. Moran?
***

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THE WITNESS: I helped them evaluate the Candlewood – the offers that
Candlewood brought to the table.
(Doc. 111 at 6).
Although Plaintiff provides evidence showing that Moran was involved in the
business dealings with Candlewood, Plaintiff fails to provide evidence to confirm that the
business dealings with Candlewood led to a breach of the Houlihan contract.
Notwithstanding this shortcoming, Plaintiff insists that Defendant’s motion for summary
judgment must fail because Ohio law does not require an actual breach of the contract in
order to satisfy this tortious conduct claim. (Doc 167 at 15). The Court finds that various
Ohio and Sixth Circuit cases have in fact held that interference with a prospective
contract, rather than an actual breach, is sufficient to establish this tort. See, e.g., Am.
Mar. Officers v. Marine Eng’rs Benefit Ass’n, 503 F.3d 532, 537 (6th Cir. 2007);
Dougherty v. Parsec, Inc., 872 F.2d 766, 796 (6th Cir. 1989); Kenneth J. Majcen Assocs.
v. Phoenix Assocs., Inc., No. 76454, 2001 Ohio App. LEXIS 140, at *17 (Ohio App. Jan.
18, 2001).
To support its assertion of interference with a prospective contract, Plaintiff
highlights that Houlihan presented a revised purchase proposal to Antioch from J.H.
Whitney in May 2008. (Doc. 171-21 at 3-7). By that time, Antioch and J.H. Whitney
had progressed to the late stages of their sale process in which Whitney intended to
purchase Antioch’s assets for $54 million. (Id.) Upon learning of this deal, which would
prevent the Morgans from retaining their positions at Antioch (Doc. 170-17; 171-3; 171-

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21), Moran and the Morgan family created MAMAMO, LLC in an effort to bring other
offers to Antioch. (Doc. 111 at 27). Moran was the owner of MAMAMO. (Id.)
During the same time period as the potential J.H. Whitney deal, MAMAMO
submitted an alternative offer to Antioch’s Special Committee on June 2, 2008. (Doc.
170-11). Moran called the chair of the Special Committee, Nancy Blair, to talk to her
about the MAMAMO deal and his “hope” that she would accept the proposal. (Doc. 111
at 21). Part of the offer specified that “the Company will grant MAMAMO: The right to
nominate 4 of a total of 5 Directors.” (Doc. 170-18 at 2). The Special Committee
rejected the offer on June 4, 2008. (Doc. 17-12 at 1). James Shein, the McDermott Will
& Emory attorney writing on behalf of the Special Committee, explained that “[t]he
transaction and the MAMAMO Letter are not adequate for a company that is in default
on its debt. We also do not know if the MAMAMO entity has adequate resources to
close any transaction.” (Id.)
Plaintiff’s complaint alleges that Lee Morgan and Asha Morgan Moran then
convinced the Evolve Trustee to fire Antioch’s board of directors and name Lee and Asha
as two-thirds of the new board. (Doc. 275 at ¶ 145). Evolve sent Lee Morgan, Asha
Morgan Moran, and Marty Moran an email on June 5, 2008 announcing the unanimous
consent of Antioch’s shareholders in the removal of the board. (Doc. 170-21 at 1). After
the instatement of the new board, J.H. Whitney retracted its proposal. (Doc. 275 at ¶
148).
Plaintiff contends that Moran’s involvement in MAMAMO, and MAMAMO’s
interference with the J.H. Whitney offer is sufficient to establish a genuine issue of
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material fact as to breach. (Doc. 167 at 19). In response, Defendant claims that there is
no evidence that Marty Moran ever participated in tendering recapitalization proposals to
Antioch. (Doc. 143 at 7). Yet, Defendant never mentions MAMAMO or Moran’s role as
owner of MAMAMO during the time that MAMAMO presented an alternative offer to
the J.H. Whitney proposal.
In furtherance of its position that Moran interfered with the prospective J.H.
Whitney deal, Plaintiff presents e-mail evidence to show that Moran received information
directly from Glenn Pollack, Candlewood’s managing director. Moran would often
analyze and digest this information personally before forwarding his business suggestions
to Lee Morgan. For example, in May 2008 Moran sent an e-mail to Lee Morgan and
Asha Morgan Moran that explained the terms of the “Morgan recapitalization term sheet”
that he and Pollack had discussed, and informed Lee and Asha that Moran would let them
know if he thought the Morgan family’s MAMAMO deal was “worth pursuing.” (Docs.
171-3, 171-4). A few days later, Pollack and Moran conversed via e-mail again
regarding the MAMAMO deal they were crafting to allow the Morgan family to retain
control of Antioch. (Doc. 170-17). After the Special Committee rejected the MAMAMO
deal, Pollack e-mailed another Candlewood employee in August 2008 to inform him “I
told Marty we’d be interested in buying the company with the family.” (Doc. 171-1).
When parties present conflicting evidence at the summary judgment stage, such
as the differing views about Moran’s involvement in MAMAMO and Candlewood, the
Court’s task is not to evaluate the credibility of the parties’ evidence. Cabaniss v. City of
Riverside, 497 F. Supp. 2d 862, 872 (S.D. Ohio 2006). That task is reserved to the fact- 13 -

finder. Id. Here, the accumulation of evidence that Plaintiff presents to show that Marty
Moran independently interfered with Antioch’s prospective deal with J.H. Whitney is not
merely indicative of “aiding and abetting” Lee Morgan, as Defendant suggests. Thus,
when viewing the facts in the light most favorable to Plaintiff, the Court finds that a
genuine issue of material fact exists as to whether Marty Moran’s role as member and
one-time owner of MAMAMO constitutes interference with Antioch’s prospective deal
with J.H. Whitney, and hence with the Houlihan contract.
B. Lack of Justification
Lack of justification, the fourth element of a tortious interference with contract
claim, requires “proof that the defendant’s interference with another’s contract was
improper.” Fred Siegel Co. L.PA. v. Arter & Hadden, 707 N.E.2d 853, 858 (Ohio 1998).
The impropriety of the interference is determined by weighing certain factors:
(a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests of the
other with which the actor’s conduct interferes, (d) the interests sought to be
advanced by the actor, (e) the societal interests in protecting the freedom of action
of the actor and the contractual interests of the other, (f) the proximity or
remoteness of the actor’s conduct to the interference, and (g) the relations between
the parties.
Id. at 860 (citing § 768 of Restatement (Second) of Torts). As applied to the instant
situation, factors such as the interests sought to be advanced by Moran, the proximity of
Moran’s conduct to the interference, and the relations among Moran and Lee Morgan are
especially salient in determining impropriety.
Defendant emphasizes that Moran’s own conduct was remote from the
interference, as he only aided and abetted Lee Morgan in his own tortious behavior.

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(Doc. 189 at 4). According to Defendant, Moran merely provided input to Lee Morgan
and assisted him in his endeavors to keep the Morgan family in control of Antioch. (Id.
at 3-4). Plaintiff refutes this contention by outlining Defendant’s prominent role in
MAMAMO, including MAMAMO’s actions in “thwarting” the prospective J.H. Whitney
deal, to demonstrate Defendant’s close proximity to the interference. (Doc. 143 at 1920); see also Section IV, A, supra.
Moreover, Plaintiff highlights Moran’s personal interest in preventing a J.H.
Whitney transaction organized by Houlihan, as Moran is the husband and son-in-law to
Antioch’s current and former CEOs. (Doc. 167 at 17). A Section 363 bankruptcy sale
arranged by Houlihan could have caused the Morgans to lose their positions at Antioch,
as well as the millions of dollars they held in subordinated note debt in Antioch. (Id.)
Any deal proposed by MAMAMO, a group whose only members were Moran and
members of the Morgan family, would likely attempt to advance the interests of the
Morgan family. In support, Plaintiff provides an email from Lee Morgan to Marty Moran
and the Morgan family, sent after MAMAMO submitted its proposal to the Special
Committee. In the email, Lee Morgan expresses his hope that the Morgan family still has
a chance to retain control of Antioch, saying “[i]t appears we will not be firing the Board.
Let the negotiations begin.” (Doc. 170-19 at 1).
After weighing the factors used to determine improper interference, including the
nature of Moran’s personal conduct through the MAMAMO group, and the interests
sought to be advanced by Moran based on his relationships with members of the Morgan

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family, the Court finds that there is a genuine issue of material fact as to whether
Defendant’s interference with the Houlihan contract was improper.
C. Resulting Damages
Finally, the parties dispute the extent of the damages resulting from Moran’s role
in the negotiations and offers arranged by both Candlewood and MAMAMO. Defendant
claims that there are no damages, because neither party to the Houlihan contract breached
the agreement. (Doc. 143 at 1-2). Defendant maintains that the terms of the Houlihan
contract were fulfilled and therefore Plaintiff may not claim damages. (Id.) If any party
breached the contract, Defendant argues, it was Antioch, through Lee Morgan’s decision
to retain Candlewood. (Doc. 189 at 6). In that case, Antioch, as the breaching party, may
not recover damages. (Id.)
Plaintiff is, reasonably, unable to respond with extensive evidence that Moran’s
actions actually caused Antioch to suffer damages. Plaintiff claims that as a result of
Moran’s actions, Antioch suffered damages in the amount of the value of a Section 363
bankruptcy auction that had been proposed in the J.H. Whitney offer. (Doc. 167 at 20).
Plaintiff is constrained to speculation on this point. The issue of damages is a factual
issue best suited for expert testimony. (Id., citing In re Dwight’s Piano Co., No. 1:04-cv066, 2009 U.S. Dist. LEXIS 1724, at *7-10 (S.D. Ohio Jan. 5, 2009)). At this stage in the
litigation, expert discovery is not yet complete. See Doc. 67 at 3:09-cv-218.
Accordingly, the Court holds that a genuine issue of material fact exists as to the extent

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of damages, if any, suffered by Antioch because of Moran’s interference with the
Houlihan contract.
V.

CONCLUSION

Upon careful review of the evidence presented, the Court finds that there are disputed
issues of fact that are material to Count Ten. Accordingly, for the reasons stated here,
Defendant Marty Moran’s motion for summary judgment on Count Ten (Doc. 143) is
DENIED.
IT IS SO ORDERED.
Date: 8/2/13

/s/ Timothy S. Black
Timothy S. Black
United States District Judge

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