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Former Dallas Cowboys star Daniel Villanueva, who kicked a 21-yard field goal in the legendary Ice Bowl of 1967 and who is now considered one of the most influential Hispanic businessmen in the United States, failed to score in a multi-million dollar match in Delaware’s Court of Chancery. Chancellor William B. Chandler III ruled that an investment enterprise started by Villanueva and partner Guillermo Bron must pay a former partner a total of $1.8 million in profits from an investment in the Spanish-language television giant, Telemundo. In 1990, Villanueva, 63, and Bron started a private equity fund, Bastion Capital Fund, which has been written about extensively by the business press. It was one of the first Hispanic-run funds in Los Angeles to invest in companies that marketed to the Hispanic community, according to published reports. One large investment was in Telemundo Group Inc., the No. 2 Spanish language network, which has evolved most recently into Telemundo Communications Group. Under the restructuring, Bastion will continue to own a large stake in the company. In his decision, Chandler also found that another related entity founded by Villanueva and Bron must fork over an additional $579,815 in fees to the former partner, Jan G. Juran, resulting from an employment agreement between the parties. Apart from the sizable award, the lawsuit provides a glimpse of the investment world where interpersonal conflicts are no different from those on the gridiron. According to the opinion, the litigation was driven by a personality clash between Bron and Juran, a newer partner who was brought in to boost investment in the Bastion fund. Four years after Villanueva and Bron started Bastion, they solicited Juran, a veteran of the private equity industry, with the idea that he could grow the fund from its extremely small size of under $100 million to about $125 million, according to the opinion and lawyers involved in the case. But problems soon developed between Juran and Bron, who both had master’s degrees in business administration from Harvard Business School, according to Robert S. Saunders of Skadden Arps Slate Meagher & Flom, who represented Villanueva, Bron and their business entities in the lawsuit. Saunders works out of Skadden Arps’ Wilmington, Del., office. Juran, who is in his mid 40s, comes from the Harrisburg area and now lives in Connecticut, according to his attorney, Elizabeth M. McGeever of Prickett Jones & Elliott. Bron, who lawyers say is in his late 40s, grew up in a middle-class environment in Costa Rica and has degrees from both Harvard and the Massachusetts Institute of Technology. He was a managing director of Drexel Burnham Lambert Inc. in Los Angeles before teaming up with Villanueva, according to published reports introduced during the five-day trial held last year. After Drexel Burnham declared bankruptcy, Bron and Villanueva decided to start Bastion, according to reports. ONE OF THE RICHEST Villanueva, who has been called one of the richest Hispanics living in the United States, was born in New Mexico, the ninth of 12 children. His mother was a Mexican Indian, he told the Los Angeles Times Magazine in 1997. His father was a migrant minister. A graduate of New Mexico State University, Villanueva was drafted by the Los Angeles Rams in 1960. While with the Dallas Cowboys he became part of NFL lore when he scored his field goal against the Green Bay Packers. With temperatures at 13 degrees below zero, it was the coldest NFL game on record. Last year, fans voted it the “Most Memorable NFL Game of the Century.” Later, Villanueva worked for the KMEX, a popular Spanish-language television station. He retired from the station in 1989, shortly before he teamed up with Bron. While Villanueva and Bron have a trusting relationship, the same could not be said for Bron and Juran, according to the opinion. Chandler describes it as a personality conflict between Juran’s rigid and meticulous style and Bron’s “fast and loose” approach. Indeed, the whole Bastion operation had been more informal, according to the 58-page opinion. Rather than walking into the offices of his partners, Juran would send memos to his partners. Later, he took “copious notes in his daily planner of every single phone conversation that he had with his partners,” Chandler wrote. Chandler acknowledges this “unrelenting approach may have been abrasive to some in the industry.” The rift between Bron and Juran began to affect the office environment. “Villanueva, like a middle child caught between two fighting siblings, tried desperately to hold the ‘family’ together,” Chandler stated in his opinion. Eventually, Villanueva decided that Juran would have to be fired to preserve the business he and Bron had built. Juran was terminated in May 1996; he filed suit in June 1998. Juran claimed in the lawsuit that he was fraudulently induced to enter into an employment agreement and partnership relationship; that Villanueva and Bron breached their fiduciary duty to him; and that he was owed additional money under his employment agreement and a partnership agreement that provided for a split of profits from two investments. SPLIT DECISION Chandler did not find that the two partners were liable for fraud. As to the claims that the men breached their fiduciary duty to Juran, Chandler was split. He decided in one instance they had not breached their fiduciary duty and in other that they had. Chandler did find that Juran was owed a placement fee of $314,815 and a consulting fee of $265,000. What’s more, Chandler found that Juran was entitled to $1.8 million in profits from the Telemundo investment. The business dealing between Villanueva and Bron, documented in several articles in the Los Angeles newspapers, show how the former football star went from being a television personality to an investment wizard. The lawsuit illustrates the close-working relationship between the two men. Bron had worked on developing Bastion while at Drexel Burnham, but when that firm folded, he enlisted Villanueva to started the fund. After raising $72.5 million in commitments from institutional investors, the fund had its first closing in July 1994. Not long after that Bastion invested in Telemundo. Earlier that year, Villanueva and Bron had begun to woo Juran, who had been a private equity principal at Butler Capital Corp. The two partners felt Juran’s track record in the industry would instill confidence among potential investors, the opinion said. The three negotiated a partnership agreement that provided that Juran would become a general partner in the partnership that ran the fund. An employment contract provided for Juran to join the management company as an employee. But after joining Bastion in late 1994, Juran became concerned because Villanueva and Bron had not presented him with a written partnership agreement that would reflect his 20 percent equity participation in Bastion. When Juran did not receive the agreement by June 1995, he resigned. The resignation surprised Villanueva and Bron, who quickly presented Juran with a partnership agreement. In that contract, Juran had a 20 percent stake in the limited partnership that ran Bastion. Juran also signed an employment contract that said his employment would be “at-will.” Still, the tensions that developed between Bron and Juran during the difficult negotiations continued. By August 1995, Bron asked Villanueva to enter into a stockholders’ voting agreement which provided that they would vote their shares of the management company’s stock to fire Juran if either one of them desired it. Juran was not told about it. In his lawsuit, Juran contends that Bron and Villanueva fraudulently induced him to enter into the partnership and employment contracts by not disclosing the mutual proxy agreement regarding his ouster. FRAUD CLAIM FAILS Chandler found that Juran’s fraud claim failed because he could not satisfy the requirements of either common law or statutory fraud. In his opinion Chandler said that Juran could not establish that an enforceable secret voting agreement existed in either written or oral form at the time Juran agreed to join Bastion — and later to stay on. “It is quite natural that two men that have a long working relationship and a business history would want to be ‘on the same page’ in running their business. It is also quite understandable that two partners who had worked to build a private equity fund from scratch wanted to protect their business in case a new partner they brought in did not work out,” Chandler stated in his opinion. The judge was less favorable to Bron and Villanueva regarding Juran’s share of the profits from the Telemundo investments, however. The fund investments in Telemundo were sold in 1998 for a total gain of nearly $60 million. Of that amount, Villanueva, Bron and Juran received $5.4 million, which was to be distributed to each partner in the limited partnership that ran the fund. Juran’s initial distribution was $366,933, but he contended that, under the partnership agreement’s distribution scheme, he should have received approximately $1.8 million. The defendants said their calculations showed Juran’s share was nearly $850,000, but that the amount was reduced by nearly $500,000 to create reserves to cover any short falls in the required rate of return to investors — or what is known as a “claw-back.” The defendants contended they need to maintain this reserve so they would not have problems collecting from Juran in the future. Chandler found this argument unpersuasive, saying Juran was contractually bound to refund the money if the claw-back provision came into play. More than that, Chandler felt the initial calculation of Juran’s share of the profits was faulty and that he was actually owed $1.8 million. Indeed, Bastion’s own in-house analyst had come to the conclusion that Juran was entitled to $1.8 million, Villanueva was due $2.4 million and Bron entitled to $1.8 million. “I think it significant to note at this point that, at trial, evidence developed showing that [the in-house] calculations were presented to Bron, and it was only after Bron saw this calculations that he told [the in-house analyst] to go back to the drawing board,” the opinion said. Besides McGeever, Paul M. Lukoff and Elizabeth Wilburn of Prickett Jones represented Juran. Robert S. Saunders and Laura S. Clare, also of the Wilmington office of Skadden Arps, represented defendants. The case is Jan G. Juran, et al. v. Guillermo Bron, Daniel D. Villanueva, et al., CA No. 16464.

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