Referring to the suit brought against the company he once led as CEO, attorneys for Block Communications Inc. described Allan Block’s lawsuit as a “conflict between Ohio corporate law ... and Allan’s desire to impose his will regardless of what the majority of shareholders want.”
Attorneys for BCI this week filed a response to the amended complaint Allan Block’s attorneys filed May 28 claiming breach of contract and breach of fiduciary duties.
BCI’s lawyers argued Ohio law permits the company’s board of directors to “evaluate strategic alternatives, which range from continuing forward under management’s current plan to refinancing to a potential sale of all or parts of the business.”
They go on to argue Allan Block was removed as CEO when “he acted to imperil and impair the exploratory strategic committee’s work and to publicly disparage the company.”
The filing laments how Allan Block “raced into court complaining of a ‘fire sale’ when in fact no sale — fire or otherwise — is even on the table” and asserts a key problem Allan Block faces “is that the type of power he covets is not the kind Ohio law endorses.”
In its response, BCI admits the board adopted resolutions on Jan. 22 to form an exploratory strategic committee to “assess strategic alternatives” and that Allan Block was not initially a member of that committee, but there has not been any decision to sell BCI.
Also, while acknowledging Allan Block’s more than 30 year role as a top BCI executive, the company asserts, however, that it “achieved extraordinary and sustained success” not solely due to Allan Block’s efforts, but “through the collective efforts of its many employees, officers, and directors.”
On May 8, Allan Block filed a motion seeking a preliminary injunction to prevent BCI, his brother John Robinson Block, and other members of the family from potentially selling the business. Block Communications is the parent company of The Blade and Buckeye Broadband, among other companies.
In the lawsuit, Allan Block wanted to be placed on the committee exploring the possible sale of the company, to stop the committee from exploring the possible sale of the business until he was placed on the committee, and to prevent corporate funds from being spent by the committee until he was made a member of the committee.
On May 20, BCI’s board of directors voted to place Allan Block and two other individuals — Jodi Miehls, BCI’s president and chief operating officer, and John Straub — on the exploratory strategic committee immediately. At that same meeting, the board removed Allan Block from his position as CEO and chairman of the board. He remains a shareholder and on the board of directors.
In the May 28 filing, Allan Block’s attorneys described the events of May 20 as “a cynical and bad faith maneuver” to give him what he wanted – getting added to the committee — but that they used his May 8 lawsuit “as a pretext to remove him as the company’s CEO and strip him of his status as chairman of BCI’s board.”
BCI’s response only addressed the portions of Allan Block’s amended complaint that pertain to the company, and attorneys for John Robinson Block filed a response on his behalf while attorneys for the other family members named in the suit filed their own response.
In his response, attorneys for John Robinson Block described the matter as a case “about a CEO ... abusing his position to advance his own interests over the majority of the company’s shareholders.”
“As was his right, Allan James Block voted against formation of the exploratory strategic committee,” the response continues. “However, because he was clearly out-voted, Allan James Block also took additional, improper steps to disparage and harass the board members who did not agree with [him], and to impede and undermine the exploratory strategic committee.
“Allan James Block was well aware that his improper actions might also drive down the value of the company, but he clearly preferred to lead a diminished company than to allow the board to check his power or the exploratory strategic committee to perform its work.”
In his amended complaint filed on May 28, Allan Block raised issues about not having “unfettered access” for BCI’s books and records.
In his response Wednesday, attorneys for John Robinson Block alleged their client’s own request in April, 2023, for the company’s books and records pertaining to “any proposed or potential sale or acquisition of the company or its subsidiaries” was not fulfilled in a timely manner or in its entirety.
In BCI’s response Wednesday, it indicated its desire for a jury trial.
The case is being handled in Lucas County Common Pleas Court, where Judge Jonathan Hein has set out a timeline for mediation.
When reached Friday, Allan Block did not immediately have a comment.
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