Brother’s suit alleges Hatfield’s Szawlowski companies trying to force him out

  • Carl Szawlowski drives the Harvester and fills trucks in a field off Coles Meadow Rd in Hatfield Tuesday, July 31 2018.

  • Frank Szawlowski looks over White potatoes that were the first of the season dug in late July. "Look at these," he said "They are beautiful, I'm proud of these potatoes."

Staff Writer
Published: 8/12/2019 10:37:29 PM

NORTHAMPTON — One of the three brothers who own the Szawlowski companies, which include Hatfield’s Szawlowski Potato Farms, is suing the other two in Hampshire Superior Court, alleging that his siblings and family members are forcing him out of the business and that company funds are being misused.

In an eight-count lawsuit, Stanley Szawlowski and his son Joseph Szawlowski are suing Stanley’s brothers Frank Szawlowski and Chester Szawlowski, and the family’s companies, Szawlowski Potato Farms, C&F Farms, Szawlowski Realty, J&S Farms and Szawlowski Packers. Joseph has his father’s power of attorney.

Pamela Szawlowski, who is a daughter of Chester, and Melanie Wickles and Shelley Szawlowski, who are daughters of Frank, are also named as defendants in the lawsuit.

According to its website, Szawlowski Potato Farms was founded by Polish immigrant John Szawlowski in 1910. Szawlowski is the grandfather of Chester, Frank and Stanley. The website also claims that it is the biggest potato grower in Massachusetts and that it has “5,000 acres of potatoes under production in the Massachusetts towns of Hatfield, Northampton, Hadley, Amherst, Sunderland, and Whately.”

The lawsuit, filed in Hampshire Superior Court, alleges that, prior to 2018, the Szawlowski companies were run by unanimous consent of their shareholders. However, in December 2018, the lawsuit says, Stanley received a letter saying that the boards and leadership of the companies had been reorganized, and that the shareholder stock redemption agreement had been amended on Nov. 30 through the written consent of Frank and Chester. The suit alleges Stanley was not consulted about or given notice of these changes.

“Stanley and his son Joseph are very disappointed to resort to the courts to address their grievances,” said James Martin, a lawyer with Robinson Donovan P.C. of Springfield, who is representing the plaintiffs.

A major change made to the shareholder agreement, the lawsuit states, was the way in which shares of a terminating shareholder would be repurchased. An appraisal process, applicable in the event of a dispute, was replaced with the “‘fair market value of the terminating shareholder’s interest,’ a measure of value which significantly discounts the value of a terminating shareholder’s interests,” the suit states.

The lawsuit goes on to say that C&F, J&S, Szawlowski Realty and Szawlowski Potato Farms were reorganized with boards consisting of Frank, Chester, Pamela and Shelley Szawlowski and Melanie Wickles, and that Szawlowski Packers was reorganized with managers consisting of the same five people.

The lawsuit alleges that the Nov. 30 changes to the shareholder agreement, “the purported and invalid consent actions, and the change in managers of Szawlowski Packers are part of an effort by Frank and Chester to force Stanley and his children out of the Szawlowski Companies at an artificially low price so that Frank and Chester and their children may recognize the full value of the Szawlowski Companies for themselves.”

The lawsuit indicates that the value of the Szawlowski companies is in excess of $15 million.

Attempts to reach the defendants were unsuccessful, including phone calls to Szawlowski Potato Farms in Hatfield. The attorney who represented the defendants in the shareholder agreement reorganization also did not return calls seeking comment.

In addition to the organizational and shareholder agreement changes, the lawsuit alleges that Frank Szawlowski and Shelley Szawlowski have used contractors employed and paid for by the Szawlowski companies to improve properties they own; that Frank has entered into an agreement with another farmer to grow potatoes and has used one or more of the Szawlowski companies to pay his share of the cost of growing the potatoes; and that he has received payments in excess of those given to Stanley and Chester.

Additionally, it claims that a Maine company of which Frank is a part has helped a seed potato supplier to sell the Szawlowski companies seed potatoes at above the market rate.

The lawsuit also alleges that Joseph Szawlowski, Stanley Szawlowski’s son, was terminated from the position of pack house manager for C&F on the next business day after Stanley requested records of the Szawlowski companies.

The lawsuit seeks an appraisal and payment of the fair value of Stanley Szawlowski’s shares, as well as an injunction against him being named a terminating shareholder; damages; a declaration that the shareholder agreement portion that prohibits him from pursuing a shareholder derivative action is unenforceable; the imposition of a constructive trust on all monies and the value of all benefits received by the defendants through their breach of fiduciary duty, attorney’s fees and expenses, interest, costs and whatever other relief the court deems just and proper.

Bera Dunau can be reached at bdunau@gazettenet.com


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