Ex-Owner Claims Paper-Sale Fraud
Dana Haston contends in a lawsuit that her former attorney used deceit and fraud to swindle her out of ownership of The Madison County Record.
Haston is suing Timothy Crowson, his law firm and The Record’s owners for an unspecified amount of punitive damages.
The lawsuit, filed this week, says Crowson conspired with others to deprive her of her interest in the Madison newspaper at a price that was less that fair.
Crowson’s actions violated a state law that prohibits lawyers from taking advantage of their clients, Huntsville attorney Allen Brinkley said, Brinkley, who filed the lawsuit for Haston, said Crowson took advantage of Haston’s financial troubles to take over newspaper.
“When a trusted adviser turns on you, you are out of luck,” he said, “The business was failing and he (Crowson) took advantage of the situation by buying the paper for himself.”
Crowson declined Thursday to talk about the case.
According to the lawsuit, here’s what transpired:
Haston and her former husband, Richard A, Haston, who owned the Record, hired Crowson and his law firm; Crowson Partners of Madison, in 1989 to represent her and the newspaper.
The Hastons had financial troubles and on June 30, 1992, filed for bankruptcy to reorganize their debts. Finances and other problems drove a wedge between the Hastons. They divorced mid-1994, and Dana Haston became sole owner of the paper.
About this time, Crowson began suggesting to Haston that she needed investors to help her handle the paper’s financial problems. Crowson suggested some individuals, but in late 1994, someone else proposed buying the Record. Crowson prepared some paper for the sale, but it never went through.
Crowson continued to urge Haston to consider the investors he had suggested, and said he had drawn up papers in which they agreed not to disclose to anyone their negotiations to invest in the paper. But he declined to give Haston copies of the nondisclosure agreements signed by the proposed investors.
He also said he would keep the agreements at his office, and that he did not have to sign the papers himself because everything he did for her was protected as privileged information between an attorney and his client.
On March 31, 1995, Haston and Crowson met with the potential investors, Ted Romine and Philimond S. “ Sparky” Smith.
The investors proposed to buy a 90 percent interest in the paper. The other 10 percent would be held in an irrevocable trust for her two children.
Haston would be employed by the paper for a year after the sale and receive 25 percent of sales that would go directly to the bankruptcy plan. Another 10 percent of the receivables would go directly to her. She would also receive a percentage of an increase in sales.
All the parties at the meeting understood that the proposed sale had to be approved by the U.S. Bankruptcy Court.
Haston received a letter from Crowson on May 4, 1995 that summarized some of their meetings and phone conversations. She became alarmed when Crowson referred to Romine and Smith as “my clients.” Crowson later told her that was just formality, and he was still her lawyer.
Based on Crowson’s reassurances, she sold the paper to Romine and Smith. It was not until she reviewed the sale documents that she discovered that Crowson was listed as one of the owners of the corporation that had bought her business.