Mendocino Wine Group has filed a complaint against former president Paul Dolan claiming he leaked trade secrets, steered opportunities away from the company and deprived it of profits.
Dolan: ‘never did anything to harm MWG’
MWG’s cross-complaint, filed two weeks ago in California’s Mendocino County Superior Court, seeks unspecified damages from Dolan for improperly hiding his role with wine company HDD, which he founded with Phil Hurst, Bill Hambrecht and his son Heath Dolan in 2008.
They said Dolan claimed he was a passive investor in HDD, but the cross-complaint contends Dolan failed to disclose he was working with HDD.
The fact that HHD brands include Truett Hurst, Bradford Mountain, Healdsburg, Stonegate and Sonoma County’s VML mean that it is a direct competitor to MWG, the complaint says.
MWG’s chief operating officer Thomas Thornhill said ‘we elected to file the cross-complaint now, as we are just beginning to understand the extent of the financial impact of Mr Dolan’s actions on our business.’
Dolan’s attorney Greg Spaulding disagreed: ‘He was never anything more than an investor until he left MWG. He did nothing to harm MWG and was working with them to build it as an entity.’
Dolan filed a lawsuit against MWG in March this year, saying he was entitled to more than the US$119,000 MWG has offered him for his 30% stake in the company.
Dolan and the Thornhill family founded MWG in 2004, to buy Parducci Wine Cellars. The company now has five wine brands, including Paul Dolan Vineyards which, despite Dolan’s parting company with MWG in January this year, remains in the portfolio.
Dolan invested $200,000 in the company, which has since grown to an estimated value of US$10m, Spaulding said.
A judge denied MWG’s request for a dismissal of the lawsuit this May. The court will set a trial date in September.
Written by David Furer