Former manufacturing executives claim false promises ruined careers

Kelly Holleran Jun. 22, 2010, 6:36am

In a recently filed lawsuit, two men claim they had successful careers in the construction industry until they were lured away by the owners of a new company making false promises.

Perry D. Wright and Lee A. Murphy claim they were well-regarded and well-compensated employees at Chicago Bridge and Iron in Beaumont until they were cajoled away from their jobs in the summer of 2007.

CBI is an engineering and construction company providing services in the energy and petrochemical industries.

Wright, who had previously served as vice president of operations in charge of CBI's Beaumont operations, had worked for CBI for nearly 20 years when Will and Casey Crenshaw aggressively pursued and recruited him to work for their start-up company, defendant Modern EPC.

Modern EPC, which stands for "engineering, procurement and coonstruction," was a subsidiary of the Crenshaw-owned drilling rig manufacturer Modern Group Inc. of Beaumont.

According to the complaint filed June 9 in Jefferson County District Court, the same was true for Murphy, who had worked as CBI's vice president of marketing for 20 years when he accepted the new job offer at Modern, the suit states.

The men allege the Crenshaws promised that their new venture would be adequately financed and given time at least five years to succeed. They also assured the men that their commitment to the venture was long-term and that they would be able to trust the Crenshaws to act fairly in regards to the new business, the complaint says.

"To induce them to leave those enviable careers, the Crenshaws promised that not only would they provide an equally if not more steady and secure situation, but they could 'trust' them to stand behind their promises," the suit states.

Relying on the Crenshaws' promises, Wright and Murphy agreed to leave their high-ranking posts and to join Modern EPC, the suit states.

Under their new employment, the men signed a written agreement on Dec. 18, 2007, in which the company promised to compensate them the equivalent of five percent of Modern's value or, in the event of a change in control, the greater of either 5 percent of the company's value or $1 million, according to the complaint.

From the start, Modern was successful, earning a substantial profit in 2008, its first full year in business, according to the complaint.

By the spring of 2009, the company was experiencing so much success that a number of other participants in the industry had either initiated a joint venture or buy-out discussions with Modern, the suit states.

Suddenly, without any notice to their employees, the Crenshaws closed Modern on May 1, 2009, and terminated all of the company's employees, the complaint says.

"Neither Wright nor Murphy was consulted about, or involved in, the Crenshaws' capricious decision, and they were capriciously dismissed without as much as a handshake, much less the substantial compensation they were due," the suit states.

Wright and Murphy claim they were stumped by the Crenshaws' "bizarre" actions, in part because the company had just opened a brand-new, state-of-the-art plant on Highway 90 in Beaumont. In addition, the company had on-going and profitable projects at the time of its closure and a substantial backlog of projects, according to the complaint.

After the plant's closure, nearly 100 former Modern employees filed suit against the company, the suit states. The Crenshaws responded to the employees' allegations by blaming Wright and Murphy for the company's closure, the complaint says.

"The Crenshaws claimed that Wright and Murphy had (1) run the business into the ground; (2) concealed losses; (3) poorly managed the company; (4) 'were blowing air up their [the Crenshaws'] skirts regarding the Valero job; and (5) were responsible for the demise of Modern EPC," the suit states. "Each of these statements were demonstrably false and the Crenshaws did not have the right to make them."

In their complaint against Modern, Wright and Murphy allege fraud, brach of fiduciary duty, promissory estoppel, negligent misrepresentation, defamation, breach of contract, negligence and gross negligence.

They are seeking exemplary, punitive and compensatory damages, plus attorneys' fees, costs, pre- and post-judgment interest and other relief to which they may be entitled.

Craig Lewis and John J. Brothers of The Lewis Law Firm in Houston and Robert B. Dunham of Sheldon and Dunham in Beaumont will be representing them.

The case has been assigned to Judge Milton Shuffield.

Jefferson County District Court case number: D187-046.

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