Woodstock
Now comes the hard part: collecting the money.
Linda West, who worked as an accountant at Seldon from 2003 to 2012, sued the company in superior court in 2013, alleging that she was fired after she complained that the company misappropriated EB-5 funds to pay for a company officer’s purchase of Seldon stock in addition to his federal and state income taxes.
On Thursday, a six-person jury at the Woodstock courthouse, comprised of four men and two women with judge Mary Miles Teachout presiding, awarded West compensatory damages of $325,623 in lost back pay and $74,377 in lost future pay stemming from her suit, according to court documents. No punitive damages were awarded.
Seldon Technologies shut down last year after its South Africa-based owner stopped funding the company, laying off 32 employees at its Windsor laboratory. The company’s assets and patents were subsequently auctioned off to a Utah water filter maker.
The default judgment also added to the claims of poor oversight of Vermont’s involvement in the EB-5 program, as the immigrant investor program is known, because it coincides with the collapsed Jay Peak resort project. Federal authorities and the state in April filed civil complaints against Jay Peak’s owner, alleging that he ran a “Ponzi-like” scheme that diverted millions of dollars from foreign investors seeking visas for his personal use.
The jury’s verdict follows a default judgment entered against Seldon on May 19 by Teachout after the defendant stopped participating in the lawsuit’s discovery process and did not respond to a court order to appoint a new attorney after the company’s former attorney withdrew from the case last December.
Seldon also did not have any attorney present during Thursday’s hearing, during which West’s attorney, Norman Watts, of Woodstock, walked the jury through the claims in the lawsuit that were determined to be facts as a result of the prior default judgment. West, 65, also took the stand to testify under questioning by her attorney.
Typically, companies carry insurance to cover themselves in the event of unfavorable judgments in civil action cases. But collecting the damages on West’s behalf might prove to be a lengthy challenge given the murky situation in regard to the legal status of Seldon as a corporate entity and upon whom ultimately must shoulder the award, Watts acknowledged.
Liability technically would fall to defendant Seldon Technologies as a corporate entity, although the corporation’s legal status is not clear: the Vermont Secretary of State’s website says the company last filed an annual report in 2014, and its business status is listed as terminated.
The defendant has 30 days to appeal the jury’s award, but if an appeal is not filed, then Watts said he will move to “pierce the veil” of the corporation and seek to hold Seldon’s former directors personally liable for damages. Watts said the directors never informed creditors and potential claimants, as required under Vermont state law, about the sale of the assets, which Watts said would render the asset sale a “fraudulent transaction.”
Carbon Block Technology, which acquired Seldon’s assets, was not a party to West’s lawsuit.
John Lippman can be reached at jlippman@vnews.com or 603-727-3219.
