Investment giant Franklin Resources won dismissal of a majority of counts in a $136 million fraud suit brought by the son of a man who originally helped fund the initial start-up of Franklin.
U,S. Magistrate Judge Laurel Beeler issued a final order Tuesday dismissing former Franklin president and CEO Charles Johnson from the case and all the federal claims of fraud and negligence against Franklin.
She found the claims were beyond the three-year statute of limitations.
The only surviving claims are two Delaware state claims.
Anthony P. Miele III claimed that Johnson and Franklin, a mutual fund investment firm, had kept secret for decades that he was heir to original shares in the company and the initial investment by Miele’s father was now worth $136 million.
Franklin countered that it had evidence to show Miele had sold the shares to a family friend 25 years ago for $2 million.
Miele senior made a loan of $100,000 to Franklin while it was struggling in its early years and he received 4,000 shares of Franklin in 1973 as a bonus for making the loan.
He died when his son was just three years old and the stock was held for years by lawyers for the family. In 1991, the Bank of New York reported $186,000 in uncashed dividend checks for Miele III.
Miele argued that by 2015 what would have been $20 million in dividends and 2.5 million shares were never delivered to him.
Beeler indicated during a July hearing that she would dismiss the bulk of the claims against Franklin. The ruling Tuesday made her tentative findings final.
Beeler held that Miele received documents from Franklin as far back as 1991 confirming the existence of shares and dividends. If Miele is arguing that his claims did not commence until he knew in 2014 that he could sue Franklin, “this argument fails,” she said.
Beeler declined Franklin’s request for sanctions against Miele for an allegedly frivolous claim.
Case: Miele v. Franklin Resources, No. 15-cv-199LB
TrialInsider.com 