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Scooter Works founder claims co-workers conspired to boot him from company

By Andrew Thomason | Jul 31, 2014

In a lawsuit that reads like it could be a script for a workplace television drama, the founder of a scooter parts dealer accuses his former co-workers of using electronic surveillance, intimidation, back-stabbing and financial pressure to push him out of his company.

Philip McCaleb claims his co-workers at Scooter Works spent years working to put him “in the most vulnerable position, by terminating him, terminating the lease with his property, and slandering him to his soon-to-be-ex-wife, then making a low-ball offer when [he] inevitably tendered his shares, in the hopes that [he] could do nothing but accept.”

McCaleb founded Scooter Works USA, a scooter supply store, in 1991 in Chicago, according to the July 16 suit he filed in the Cook County Circuit Court.

In 2002, McCaleb alleges he co-founded Genuine Scooters LLC to begin selling new scooters with vintage Vespa scooter parts. He contends his companies were doing well, but suffered financially due to the 2008 recession.

Unable to pay their debts, the suit states the companies sought outside investors, which eventually led Chicago Associates Inc. to offer $4 million for a 54 percent interest in the two, a 2011 deal that created Scooter Works Holdings LLC.

Under the new agreement, McCaleb asserts a board of managers was created to oversee the companies. Chicago Associates, the suit notes, selected three managers and Scooter Works USA picked two.

Scooter Works USA named McCaleb and Jim Kolbe as managers, while Chicago Associates selected Dorothy Hanley, William Jackson and Paul Leinwand.

McCaleb’s complaint names Scooter Works Holdings LLC, Genuine Scooters LLC, Hanley, Jackson, Leinwand and Kolbe as defendants and includes counts alleging breach of contract, shareholder oppression, fraud and civil conspiracy, among others.

In his suit, McCaleb claims Hanley sought to get rid of him almost immediately.

Hanley “began disparaging Philip to Jackson, Kolbe and Leinwand to convince them that he should be terminated, with Hanley as his replacement. Hanley also made it her mission to poison the employee’s opinion of Philip, so that he would have no support from his supervisors or his subordinates," the suit alleges.

By October 2012, about a year and a half after the new management system was implemented, the complaint states Hanley and co-defendant Kolbe drafted a memo titled “Reasons to terminate Philip McCaleb for Cause.”

McCaleb accuses Hanley and others of spying on his email account, even deleting some of his messages, and the managers of telling new hires to avoid reporting to him, even if they were his direct subordinates.

It took six more months of bickering, including emails poking fun at McCaleb for having a serious medical condition, but McCaleb eventually “involuntarily resigned,” the suit alleges.

McCaleb claims he was then offered and took a consultant position at Scooter Works Holdings, despite the environment because he didn't have any better job prospects.

The position was an “illusory” one, the suit states, contending it was created to satiate scooter dealers and customers that McCaleb had existing relationships with.

Around the same time he came back to the company, McCaleb claims Hanley ended the lease on a building that he owned a large share of.

Hanley and others were “giddy at having not only successfully terminated Philip but also cut off his income from the Damen lease,” according to the complaint.

Looking for an exit from the allegedly toxic work environment, McCaleb asserts he tried to cash out and offered his shares to the company. The suit states defendant Jackson informed McCaleb his shares were worth about $500,000, less than half of what he’d be told they were worth just three years before.

It was after this that McCaleb decided to file his lawsuit.

He is suing Hanley, Kolbe, Jackson and Leinwand for breach of fiduciary duty, civil conspiracy, shareholder oppression, breach of contract, breach of implied covenant of good faith and fair dealings, and tortious interference with economic expectancy.

McCaleb's suit singles out Jackson for fraud regarding his alleged valuation of his shares.

His suit includes counts against Scooter Works Holdings and Genuine Scooters breach of contract and breach of implied covenant of good faith and fair dealings. Scooter Works was also hit with an additional count alleging wrongful termination.

McCaleb is asking that Hanley, Kolbe, Jackson and Leinwand stop their “disparaging and abusive” communication about and with McCaleb and that the court reinstate him to his original role at Scooter Works Holdings.

Represented by Lawrence W. Byrne and Colin M. Seals of Pedersen & Houpt in Chicago, McCaleb is seeking a judgment in his favor, as well as a variety of damages, including punitive damages, and attorney's fees and costs.

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