Punderson: Bankruptcy, lawsuit have nothing to do with bid for Selectman
Date: 3/13/2014
By Chris Maza
chrism@thereminder.comEAST LONGMEADOW – Former Selectman Peter Punderson filed for bankruptcy on Jan. 11, but said it has nothing to do with his ability to run for the Board of Selectman or to serve effectively if elected.
Punderson told
Reminder Publications the business difficulties he faced with Scantic Valley Oil, LLC, were going on for the last three years during his previous time on the board as well as when he was a member of the Planning Board.
He said that an on-going lawsuit from his former business partner Charles Richard prompted the Chapter Seven bankruptcy.
Punderson said, “I would have never declared bankruptcy without the lawsuit.”
He added that he took the legal action to “protect myself and my family.”
Punderson is running for Debra Boronski’s soon-to-be vacant seat on the Board of Selectmen. His opponent is William Gorman in the town’s only contested race.
Previously, Punderson was elected to the position over current Selectman Angela Thorpe in December 2012 in a special election for the remainder of former Selectman James Driscoll’s vacated seat by 12 votes, prompting Thorpe to request a recount, which confirmed Punderson’s victory on Jan. 5, 2013.
In April 2013, Punderson lost his bid for re-election to Thorpe by 84 votes.
His bankruptcy petition came weeks after Richard continued to pursue his lawsuit against Punderson by filing a motion of assessment of damages and entry of final judgment in which he sought $202,800 from Punderson.
In the motion, Richard and his attorney, Bruce Melikian of Hurley & Melikian, P.C., allege that Punderson “breached his duties of loyalty, full disclosure, due care and good faith by his actions in co-mingling and converting Scantic [Valley Oil] income and assets to his own use,” which forced the business to close in 2011.
Punderson said the suit was retribution from his former business partner and not based in fact. He claimed that an employee’s theft of money from the company, and nefarious business practices of a competitor led to the company’s downfall, not any illicit actions on his part.
“That lawsuit was filed last year after our business closed three years ago because of embezzlement and because the person we bought the business from stole our clients when he opened another business right after his non-compete agreement with us expired,” Punderson said.
When contacted for comment, Melikian said all proceedings regarding his client’s case against Punderson were on hold because of the pending bankruptcy petition and it would be “inappropriate” to comment, but added that the contents of the motion “speak for themselves.”
According to court filings, Richard first brought forth the lawsuit on April 8, 2013 and it was later reported to the court on May 15, 2013 that Punderson had been served.
On June 20, 2013, Punderson was found in Hampden County Superior Court to be in default, according to Massachusetts Civil Procedure 55a, which states, “When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter his default.”
On Dec. 19, 2013, in response to the default finding, Melikian filed the motion for damages and judgment.
The motion states that Richard secured a mortgage for $177,800, utilizing his personal residence as collateral, in order to buy Scantic Valley Oil, with Richard owning 51 percent, with the understanding that the loan would be paid out of operating revenues from the business within three years of its purchase on Oct. 18, 2006.
The document further alleges that while operating the business, Punderson “co-mingled” income from Scantic Valley with other companies he owned and “converted income and assets of Scantic Valley Oil, LLC, to his own personal use.”
This practice continued, the motion alleges, after the company was notified that Springfield Terminals Inc. would no longer sell wholesale heating oil to the company unless it was given first position on a line of credit, at which time Richard surrendered his equity position to Springfield Terminals.
In May 2011, Springfield Terminals foreclosed on its line of credit with Scantic Valley Oil, prompting its closure.
