Please ensure Javascript is enabled for purposes of website accessibility

SECO sues Flanigan IV for $395K

The late Pierce J. Flanigan III was in the business of making things smooth, from the Baltimore Beltway to the tarmac at what is now Baltimore-Washington International Thurgood Marshall Airport. Now, his survivors and one of his former companies are involved in litigation that could prove rocky.

Parkton-based Standard Equipment Co. is seeking at least $445,000 from Flanigan’s son and a family trust for allegedly keeping too much money from the company’s sale last year. The lawsuit, filed in Baltimore County Circuit Court last week, alleges Pierce J. Flanigan IV and the trustees improperly kept at least $395,000 “in the form of the remaining proceeds” from the sale.

Flanigan IV succeeded his father as president of P. Flanigan & Sons Inc., a 125-year-old construction company that has been involved in building much of the Baltimore region’s transportation infrastructure. A call to his office Monday afternoon was not returned.

P. Flanigan & Sons is not involved in the current dispute. In addition to BWI and the beltway, the company has worked on the Seagirt Marine Terminal and the Jones Falls Expressway.

Pierce J. Flanigan III, a community leader and outdoorsman, died of a brain hemorrhage in 2008 at age 66. The city is scheduled to break ground this year on an Inner Harbor park that will be named in his honor.

Flanigan III, and then the marital trust, owned more than 96 percent of Standard Equipment, also known as SECO, according to the lawsuit. The trust elected Pierce Flanigan IV chairman of SECO’s board before the company was sold last June to New Jersey-based Jesco Inc., a construction equipment company with four offices in Maryland, including Baltimore.

The trust and SECO entered a memorandum of understanding a day before the sale that called for SECO to buy back all of the trust’s stock in SECO for $8.6 million.

Most of that money was to come from proceeds of a life insurance policy that were already in escrow, but about $2.4 million was to be funded from the sale of SECO’s assets to Jesco.

SECO alleges that when Jesco transferred the proceeds of the sale to the trust, the amount was $395,000 more than the Flanigans were owed for their stock. SECO wants that money back.

“The Trust has no legal right or other right to retain the balance of sale proceeds belong to SECO,” the lawsuit states.

SECO’s repeated demands that the trust turn over the remaining balance have been ignored, the suit alleges.

Neither Robert S. Brennen nor Todd M. Reinecker of Miles & Stockbridge PC in Baltimore, SECO’s lawyers, returned calls seeking comment on Monday.

The lawsuit also alleges that the trust was supposed to create a $50,000 escrow to handle obligations and liabilities that remained after the sale to Jesco closed. SECO alleges that it has incurred such obligations and that the trustee, Mark P. Keener, has ignored its request for payment through the escrow.

The trust has been unjustly enriched by at least $445,000 between the failure to release the sales proceeds and pay the additional obligations, the lawsuit states.

Keener, a partner at Gallagher, Evelius & Jones LLP in Baltimore, said Monday afternoon he had not seen the lawsuit and declined to comment.

Other trustees named in the lawsuit are Pierce Flanigan III’s widow, Susan; his brother, John; and David S. Nesbitt, a P. Flanigan & Sons executive who acted as SECO’s agent in its sale to Jesco, according to the complaint.

The trustees are accused of unjust enrichment, constructive conversion, breach of contract and embezzlement. Pierce Flanigan IV, who is not listed as a trustee, is named only under the embezzlement count.