Estimated reading time: 3 minutes, 30 seconds

libertyLiberty Tax ended 2017 facing a growing list of court actions, The most recent is a class action suit against the tax services chain, which alleges management issues have cut share prices and hurt investors.

That came as a pension fund separately sought damages for itself and on behalf of the company. Earlier, a former executive sued the chain for defamation, saying Liberty falsely told employees and vendors that he was fired in the fall for embezzling.

The class action suit seeks damages to be awarded to investors who purchased Liberty shares between June 29, 2016 and Dec. 11, 2017. The class has not yet been certified and there is a February 13 deadline for any party that wishes to be named lead plaintiff.

The class action cites an inappropriate tone set by John Hewitt, who was fired as CEO in September but who maintains control of Liberty through his sole ownership of its Class B shares.

The defamation suit was filed by Kirke Franz Szawronski, former VP of operations, who headed the Siempre Tax chain, which provides services to the Spanish-language market. He is also alleging breach of contract. Szawronski’s lawsuit says the company shut him out of the computer system in August and pulled his last deposited paycheck from his bank account after assuming he had resigned. The lawsuit claims company officials later told employees, vendors and others who knew Szawronski that he was fired for embezzling.

In filings, Szawronski said he didn’t resign and didn’t embezzle. He wants his last paycheck, worth $7,500, and $90,000 severance, in addition to defamation damages of $2 million. He’s also seeking $75,000 for the terminated contract with K & A Publicidad, a Szawronski company, to promote the Siempre chain.

After the board of directors hired Skadden Arps in the summer to investigate complaints about Hewitt’s behavior—including allegations he was overheard having sex in the offices—it appears turnover picked up with a local newspaper reporting that when Hewitt was fired on September 5, the company “cleaned house”, parting ways with employee and contractors.

Both newspaper reports and LinkedIn profiles show significant changes in personnel. That includes Michael Piper, who resigned on September 5 as VP of financial products even though he could have received a retention bonus and CFO Kathleen Donovan, who resigned on November 5, after Hewitt utilized his rights as owner the Class B shares to replace two members of the nine-member board. Two other members soon resigned.

Among those reportedly dismissed was Karen Peck, VP on guerilla marketing from June 20, 2015 to August 2017. Also axed was Becky Elder, a longtime franchisee and contractor, who worked with Peck to train franchisees during the last three years. The publication, the Virginian Pilot, reported she was dropped after cancelling her attendance on a training trip. However, the newspaper reported Elder cancelled her trip because her 12-year-old daughter was missing and although found, required hospitalization. Liberty Tax General Counsel Vanessa Szajnoga was quoted as saying the reasons were not limited to that action. Gordon D’Angelo, VP of business development, was also reportedly dismissed.

LinkedIn profiles indicate several other departures. Angela Ianni, who joined in March 2012 as a regional director, became chief of staff in January and left in September. Among those leaving in August were Jeremey Pourbaix, who became an area developer in March 2008; Mary Jane DeJaager, who had been Liberty since August 1998 was director of strategic business relationships from April 2014; and Mike Svede, involved in field operations and support, who with Liberty from October 2012.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Last modified on Tuesday, 20 February 2018
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