Stepmother Sues Mark Melchiori, His Ex-Wife and Construction Company for Alleged Fraud
http://www.noozhawk.com/noozhawk/article/091612_mark_melchiori_linda_melchiori/
By Lara Cooper, Noozhawk Staff Writer | @laraanncooper
Defendants deny charges by company founder's widow that divorce was a scheme to hide assets
Local construction titan Mark Melchiori has been sued for fraud and breach of contract by his stepmother, who alleges that his divorce earlier this year was a scheme to hide assets from creditors his company owes.
According to Santa Barbara County Superior Court documents, Linda Melchiori filed a lawsuit against her stepson; his wife, Heather; and Melchiori Construction Co. in August. Attorneys representing Mark and Heather Melchiori have denied the lawsuit’s allegations.
Linda Melchiori is the widow of Ugo Melchiori, the founder of Melchiori Construction who died in 2009 at age 69. After his father’s death, the younger Melchiori was given the company’s shares and Linda Melchiori became the income beneficiary of her late husband’s estate — a position that she was expected to hold for approximately seven years.
Melchiori Construction Co. has faced a string of financial and business challenges since the elder Melchiori’s death. Linda Melchiori alleges that her stepson’s divorce was a way for Heather Melchiori to walk away with $8 million in assets and no debt, leaving Melchiori with $2 million and “enormous debt,” according to a complaint issued by Linda Melchiori’s attorney, Cristi Michelon.
The complaint begins in March 2012 at a time when Melchiori and the construction company were having “serious financial difficulties,” according to the filing. The complaint alleges that Heather Melchiori came to Linda Melchiori and said that if she didn’t lend the company $100,000 immediately, “Mark would go to jail, Melchiori Construction Company would go under, and Linda would get nothing.”
Five days after Linda Melchiori made the loan, the complaint alleges, Mark and Heather Melchiori contacted her to gain her cooperation in the procurement of a $1 million line of credit to cover checks that apparently had been written.
“To convince Linda to encumber assets of the Ugo Melchiori Estate,” the complaint states, “Mark and Heather promised Linda that nothing she was entitled to from the state would be in jeopardy, that Heather’s father would immediately wire money to Mark and Heather so that Linda would received $40,000 several days after the loan, and that Mark and Heather would secure their agreement with their personal assets in real property that they owed and have a lawyer memorialize all of the agreements.”
On Aug. 16, Linda Melchiori filed accusations of breach of written contract directed against Melchiori and the company for nonpayment of the $100,000 loan. Mark and Heather Melchiori are being accused of breach of oral contract because of the post-loan oral agreement, the documents show. According to the filing, the accusation of fraud is against the couple, “alleging misrepresentations, concealment and false promises.”
Linda Melchiori stated that in April, less than two weeks after the couple convinced her to help them, the Melchioris began divorce proceedings to end their 17-year marriage.
“It is my belief that through the family-law proceedings, Mark and Heather are attempting to hide, sequester and protect their assets in a scheme designed to avoid paying their creditors,” Linda Melchiori said in the statement.
The Melchioris’ slender April 11 divorce filing lists no details about the divorce other than a statement of “irreconcilable differences.” The file states that the divorce was made at Heather Melchiori’s request.
In a Sept. 4 ruling, Judge Thomas Anderle ordered that a writ of attachment in Linda Melchiori’s case could not be applied to the couple, but only to Melchiori Construction Co., which must repay the $100,000.
When contacted by Noozhawk on Friday, Michelon did not have additional comments on behalf of her client, Linda Melchiori. That was not the case for attorneys of the defendants.
Michael Ring of Ring & Associates, who is representing Heather Melchiori, told Noozhawk on Friday that the assertion that the divorce had been fabricated to hide assets was “outrageous.”
“The accusations against Heather are both legally and logically devoid of any merit whatsoever,” said Ring, who has filed a demurrer on behalf of his client in advance of an Oct. 2 court appearance.
Melchiori’s attorney, Peter Umhoff of Seed Mackall LLP, answered the complaint Thursday, denying each cause of action in Linda Melchiori’s filing.
In a statement Friday, Umhoff called the misunderstanding “unfortunate.”
“While there are many statements in the lawsuit filed by Ugo Melchiori’s widow with which Mark Melchiori strongly disagrees and which are not factually correct, we are working diligently on behalf of Mr. Melchiori and the Melchiori family to resolve these issues in a professional manner that will be acceptable to all concerned,” he said.
— Noozhawk staff writer Lara Cooper can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.
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