Justice Jeffrey Oing of New York State Supreme Court ruled that a lawsuit against Macquarie Group could proceed.

Sanford Miller, former co-CEO of Franchise Services of North America Inc. and co-chairman of the FSNA Board, issued a lawsuit against the bank for defamation, fraud, interference with his employment contract and interference with prospective business relations after he was ousted from his position in December 2012.

The judge denied the defendants’ (Macquarie Group) motion to dismiss the claims for fraud, defamation and interference with the existing contract.

The dispute began with Hertz’s acquisition of Dollar Thrifty Automotive Group. As a condition of this sale, the Federal Trade Commission (FTC) ordered Hertz to sell its Advantage brand to Franchise Services of North America (FSNA). FSNA partnered with Sydney-based Macquarie to provide the financing needed.

The Macquarie Group allegedly expressed that Miller would continue as CEO of FSNA and provide the management services. But soon after the FTC approved of the Advantage sale, the FSNA Board fired Miller.

Miller alleges that he didn’t hear about his termination until he read the FSNA press release on Dec. 7, 2012; he said he was not provided any advance written notice of his termination.

According to the case, “plaintiffs allege that the Macquarie Group offered to grant Miller millions of dollars of stock and other compensation in exchange for accepting terms disadvantageous to FSNA and FSNA’s other shareholders.”

And when Miller “refused these offers and resisted the Macquarie defendants’ efforts to marginalize FSNA, the defendants had resolved to remove Miller from his positions with FSNA and U-Save by wrongful means … as soon as possible, …” according to the case.

Bruce Donaldson, an employee of Macquarie, supposedly made false accusations against Miller to FSNA co-CEO Thomas P. McDonnell and FSNA’s general counsel, including that Miller misappropriated funds from the company and lied to Macquarie and the FSNA Board about the availability of certain property, according to the case.

During a FSNA Board meeting on Dec. 6, 2012, McDonnell presented the allegations that Donaldson made against Miller, “as well as the defendants’ demand that Miller be terminated and [defendants’] threat not to proceed with the transaction if Miller was not removed,” according to the case.

The Board was supposedly told by legal counsel that if the transaction was not completed on the present terms, it would negatively affect FSNA’s financial condition, according to the case.

Judge Oing ordered the Macquarie Group to file an answer to the amended complaint with 10 days.

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