PER CURIAM.
Following a bench trial, judgment was entered against Michael Markov; Mikhail Kvitchko; Markov Processes, Inc. (Processes); Miksoft, Inc. (Miksoft); Markov Processes International, L.L.C. (MPI), a New Jersey limited liability company; Markov Processes International, L.L.C. (MPI-Delaware), a Delaware limited liability company; and MPI, Japan, Inc. (MPI-Japan) (collectively defendants), in favor of plaintiffs Roman Tutunikov and Viktor Zurakhinsky, in the amounts of $891,979 and $668,985, respectively, including pre-judgment interest. The judge also awarded attorney fees and costs of $1,685,374.
Defendants appeal, arguing that the judge erred: 1) by finding plaintiffs were oppressed shareholders under the Business Corporation Act,
Plaintiffs cross-appeal. They contend the judge erred by undervaluing their interests, and, therefore, his award was too low.
We have considered the arguments raised in light of the record and applicable legal standards. We affirm in part, reverse in part and remand for entry of judgment consistent with this opinion.
On August 2, 2005, plaintiffs filed their complaint naming Markov, Kvitchko, Processes, Miksoft and MPI as defendants. Plaintiffs specifically brought the action "as oppressed shareholders" under the BCA and LLCA, and alleged in three counts that: 1) defendants had violated
On November 23, 2005, the parties entered into a consent order whereby MPI agreed temporarily to refrain from completing its merger with MPI-Delaware.
Plaintiffs subsequently amended their complaint to include MPI-Delaware and MPI-Japan, alleged to be a "wholly[-]owned subsidiary of [MPI]," as defendants. The amended complaint added two counts that sought to set aside the Sage transaction and requested an accounting of MPI-Japan's assets.
Defendants subsequently moved for summary judgment. On June 11, 2008, the judge entered an order denying the motion as to the first two counts of the amended complaint, i.e., claims brought under the BCA and LLCA. He granted the balance of defendants' motion, dismissing plaintiffs' claim for misappropriation of intellectual property, their demand to set aside the Sage transaction, and any claim against MPI-Japan, noting, as to the last, there was "no factual support." The case proceeded to trial.
Markov was a mathematician who came to the United States from the former Soviet Union in May 1989. In 1990, he formed a consulting firm, Processes, and began designing financial software for Balch, Hardy, Scheinman & Winston (Balch Hardy), a financial trading firm. In 1991, Markov hired Kvitchko, a Soviet computer scientist. In 1994, Kvitchko formed Miksoft to develop some of his own products, and he and Markov became equal partners in Miksoft and Processes ("the Corporations"). When Balch Hardy filed for bankruptcy in 1994, Steven Hardy, one of its principals, formed a new company and purchased the rights to Style Advisor, software Markov and Kvitchko designed. Kvitchko and Markov continued to provide consulting services through Processes.
In 1995, Tutunikov, who was working for Dow Jones as a full-time consultant, approached Markov and formed a business relationship whereby Processes would bill Dow Jones for Tutunikov's services, and payments would pass through Processes to Tutunikov. That same year, Hardy terminated the consulting arrangement with Markov and Kvitchko, leading them to initiate development of a new and improved product, Stylus. In May 1996, both plaintiffs began to work with Markov and Kvitchko on Stylus. The parties disputed the exact nature and significance of plaintiffs' contribution to the program.
In December 1996, plaintiffs, Markov and Kvitchko decided to formalize their business relationships, circulating numerous drafts of proposed operating agreements. On December 8, 1996, a draft agreement was presented at a meeting attended by the four men. It was, however, never executed.
This "Final Draft" anticipated the formation of a "prospective new company," described the anticipated distribution of "equity shares" in that company and set salaries for the four men. Under the Final Draft, Markov's and Kvitchko's combined equity share was 76%, and they were to be full-time employees compensated at $100,000 per year; Tutunikov was to receive a 15% equity share and also be a full-time employee with the same yearly compensation; Zurakhinsky was to receive a 9% equity share, be a part-time employee and receive $50,000 per year in compensation. The agreement also included a vesting schedule whereby each person's "shares" would vest over a period of three years: 66% on January 1, 1997; 85% by January 1, 1998; and 100% by January 1, 1999.
On February 8, 1997, the four men executed two resolutions, one for processes and one for Miksoft, reflecting the result of meetings held in January 1997. The resolutions provided the "stock ownership" in each corporation was: Markov — 37%; Kvitchko — 37%; Tutunikov — 15%; and Zurakhinsky — 9%. The remaining 2% of the shares were not addressed in the resolutions.
At trial, there was conflicting testimony regarding the difference in share allocation between the Final Draft and the resolutions. Markov believed the resolutions contained a typographical error and should have stated that he and Kvitchko each owned 38% of the shares. Plaintiffs both testified that the allocation in the Final Draft was in error, and the resolutions correctly stated the individual defendants' equity interests.
The vesting schedule was meant to encourage the four men to remain with the Corporations for at least two years after the resolutions were signed. Nevertheless, Tutunikov found another position and left the Corporations in March 1997. Tutunikov acknowledged that all of his fifteen shares had not yet vested when he left, and he wrote Markov indicating he was returning five shares.
Zurakhinsky left the Corporations in December 1997, when only 7.5% of his shares had vested. He began to work as a consultant for another company, Commercial Risk, a client of the Corporations. Markov and Kvitchko agreed to permit him to bill for his consulting services through the Corporations.
Although a limitation on salaries was discussed among the four, they never signed an agreement to that effect. At trial, plaintiffs contended there was a $100,000 salary cap; Markov acknowledged that partner salaries were capped at $100,000, but there was never a limitation on bonuses or total compensation. Plaintiffs produced John F. Doyle, initially a commissioned salesperson for Processes, as a witness. Doyle testified that he was told executive salaries were capped at $100,000.
On December 21, 2000, defendants filed a certificate of formation for MPI. In testimony, plaintiffs denied any knowledge of the filing. On January 1, 2001, Doyle became a shareholder in Processes.
A series of e-mails in evidence reflected the parties' understanding regarding share distribution. In an e-mail dated October 18, 2001, to Steven Foreht, an attorney who filed MPI's certificate of formation, Markov acknowledged that he and Kvitchko each had 37% of the shares, Tutunikov had 10% and Zurakhinsky had 7%. He noted that left 7% of the shares "unvested," and he understood these "[went] back to the company." Markov further explained that since Doyle now had 2%, "the unvested pool is 5%."
On October 31, 2001, Markov informed Kvitchko, Tutunikov and Zurakhinsky by e-mail that, after Doyle had been given a 2% equity stake in MPI, there remained 4.5% "in the company treasury." Markov wrote, "This portion of unvested shares . . . stays with the company, i.e., belongs to all shareholders proportiona[te]ly."
However, Miksoft's 1998, 1999, 2000 and 2001 corporate tax returns showed that Markov and Kvitchko each had 41.25% of the shares.
Meanwhile, a proposed operating argument for MPI dated January 1, 2002, named the four men and Doyle as members.
Plaintiffs did not sign the Agreement. Zurakhinsky was concerned that the agreement created "two classes of shares, so that [the individual defendants] would have . . . more rights tha[n] [he and Tutunikov] would have." He also testified that he did not sign the operating agreement because it would supersede all prior agreements. Tutunikov, dissatisfied with the creation of "two class[es] of shares" and the lack of control over management compensation, also never signed the Agreement.
Markov conceded in testimony that the 4.5 treasury shares that had been unallocated in the Corporations eventually were divided between himself and Kvitchko. MPI's tax return for 2002 listed Kvitchko and Markov as each owning 39.25% of MPI, Tutunikov owning 10%, Zurakhinsky owning 7.5% and Doyle owning 4%.
On December 19, 2003, Markov sent an e-mail to Doyle, Tutunikov, Zurakhinsky, and Kvitchko stating that MPI revenues for the year were $2.2 million, including an $80,000 profit, and salaries for Markov and Kvitchko would be raised to "market value" of $200,000 each. The same e-mail noted that Doyle was receiving $136,000 in "trailing commissions" even though he had already left the company, and that Zurakhinsky was receiving $135,000 for consulting services to Commercial Risk.
Doyle acknowledged the email during cross-examination, and stated that he believed Markov and Kvitchko had the authority to raise their compensation because they owned nearly 80% of the company. When Zurakhinsky received Markov's email, he responded by first indicating, "Congratulations with a good year!" He then wrote: "I think that 100% increase of management compensation, however justifiable, should be at least discussed among partners prior to decision."
In a May 2004 conference call, plaintiffs expressed concern with the salary increases for Markov and Kvitchko since they (plaintiffs) were not receiving distributions; they requested a buyout of their interests. In June, Markov offered to buy out plaintiffs' interests for $10,000 per share, but plaintiffs refused. Markov conceded that the amount he offered was not related to the value of the company, which he believed to be $1 million, but rather to what Markov believed the company could pay. Plaintiffs believed the company was worth $10 million, and wanted $1.8 million for their shares.
On November 3, 2004, Sage tendered a preliminary written "Outline for . . . Proposed Investment in MPI." Markov did not inform Tutunikov and Zurakhinsky about the Sage transaction negotiations at the time.
However, in December 2004, MPI's attorney advised plaintiffs' attorney of "preliminary discussions with a party that ha[d] indicated a willingness to provide financing to [MPI] at a valuation that would indicate . . . an offer to buy out [plaintiffs'] interests for $500,000 would be extre[]mely reasonable." MPI's counsel wrote:
Apparently, to the extent any negotiations continued, they did not bear fruit because, in August 2005, plaintiffs' counsel served MPI's counsel with a copy of the complaint.
The Sage proposal valued MPI at $5 million. Sage would make a $500,000 cash infusion and obtain a 9.09% equity interest in a newly-formed LLC. Sage would retain an option to make further cash investments and obtain a greater equity interest.
On October 14, 2005, MPI issued a proposed agreement reflecting its merger with MPI-Delaware. All members who did not consent to the merger were to be bought out in amounts set forth in the agreement. Tutunikov was to receive $350,000; Zurahkinsky, $262,500. The total amount of all members' interests equaled $3.5 million.
On February 23, 2007, MPI merged with MPI-Delaware. On the same day, Sage made its initial $500,000 investment, but it ultimately never exercised its option to invest further. MPI-Delaware assumed all the rights and responsibilities of MPI.
In his written decision following trial, the judge first recounted much of the testimony we recite above. He then noted:
Noting defendants' contention that the BCA did not apply because Miksoft and Processes were dissolved in 2003, and an oppressed shareholder action was not cognizable under the LLCA, the judge concluded:
The judge then addressed plaintiffs' specific claims of oppression, which he set forth earlier as: "[b]reach of 1996 agreement, particularly the salary cap"; "[b]uy-out offer of June 4, 2004"; "payment of bonuses"; the "Sage transaction"; "[c]reation of MPI . . ."; and "[r]eallocation of treasury shares."
He found that the 1996 Final Draft was not an agreement, but rather "one of a series of outlines respecting the negotiations." Based upon the subsequent conduct of the parties, the judge concluded "there was an agreement only as to share allocation and vesting. . . ." He rejected plaintiffs' claim that there was any agreement regarding salary caps, and, in this regard, he found that Doyle's testimony did "not support the contention."
The judge then recounted the conflicting evidence regarding share allocations in the Corporations. He found defendants' explanation and their contention that there were no "treasury shares" "simply not credible." The judge further found that, "upon forming the LLC, the 4.5 shares were not preserved in treasury, but allocated to defendants." The judge concluded this "constitute[d] an act of oppression and a breach of [defendants'] fiduciary duty." He determined that "Tutunikov ha[d] 10.45 shares (10 shares plus 10% of treasury) and Zurakhinsky ha[d] 7.8375 shares (7.5 shares plus 7.5% of treasury)."
The judge then determined that defendants "paid bonuses to company employees and raised salaries (including their own) without notice to the plaintiffs[,]" "engaged in negotiations with a potential investor . . . without informing . . . plaintiffs," and "controlled the business checkbook and the flow of information in such a manner to eliminate the minority shareholders[`] claims on earnings and deprive them of participation in the affairs of the company."
Having "found that . . . defendants engaged in oppressive conduct toward the minority shareholders," the judge determined "plaintiffs [were] entitled to relief under the [BCA]." He concluded that "a buy-out [of plaintiffs' interests] would fairly compensate the plaintiffs and [was] a practical alternative to dissolution of the LLC."
The judge then considered valuation of plaintiffs' interests, an issue we discuss more fully below.
At this point, we address defendants' arguments that the judge erred by applying the oppressed shareholder provisions of the BCA to MPI, an LLC, and erred in finding they engaged in any oppressive conduct toward plaintiffs. Defendants further argue that because they did not engage in oppressive conduct, and because the LLCA has no fee-shifting provision, the judge erred in awarding counsel fees to plaintiffs.
We first recognize some basic principles that inform our review.
"[T]he scope of appellate review is expanded when the alleged error on appeal focuses on the trial judge's evaluations of fact, rather than his or her findings of credibility."
The judge's "interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."
In 1973, the Legislature for the first time provided oppressed minority shareholders in closely-held corporations a statutory cause of action under the BCA.
"If the court finds that the action was maintainable under [
These provisions of the BCA recognize the uniquely disadvantageous position a minority shareholder occupies in a close corporation. As the Court explained:
Oppression "has been defined as frustrating a shareholder's reasonable expectations" and "is usually directed at a minority shareholder personally. . . ."
The purpose of the LLCA, first enacted in 1994, "was to enable members and managers of LLCs `to take advantage of both the limited liability afforded to shareholders and directors of corporations and the pass-through tax advantages available to partnerships.'"
Unlike the BCA, the LLCA has no equivalent oppressed shareholder provision. In
The recently-adopted RLLCA no longer permits a member to resign and be paid his fair value; instead, a member may withdraw, but his status thereafter is as a "disassociated member."
Given the lack of an oppressed member provision in the LLCA, our holding in
As a result, plaintiffs presented no cognizable claim regarding much of the conduct that the trial judge concluded evidenced minority shareholder oppression, because it occurred after MPI was formed. It is without question that when MPI's proposed operating agreement was circulated in 2002, plaintiffs had voluntarily removed themselves from the daily operation of the business for nearly five years.
That brings us to the reallocation of treasury shares, the only other factual determination made by the trial judge in support of his legal conclusion that the individual defendants had acted oppressively toward plaintiffs as minority shareholders.
Initially, we reject defendants' argument that there was insufficient evidence that the parties intended to create and retain treasury shares. In his opinion, the judge found that the Final Draft was not a binding agreement and rejected, for example, plaintiffs' claims regarding salary caps based upon the document. However, the judge also found that the parties reached an agreement on share allocation, including the reservation of treasury shares. Contrary to defendants' argument, he based this finding not on the Final Draft, which indicated a share aggregate totaling 100%, but on the parties conduct, the corporate resolutions that followed and Markov's emails setting forth the allocation and noting that the remaining shares went back to the "company treasury." In short, the judge's finding was supported by adequate credible evidence in the record, and we will not disturb it.
The critical issue, in our minds, is whether defendants' allocation of ownership interests in MPI to include their ownership of the 4.5% interest represented by the treasury shares amounted to oppression under
In considering whether conduct is oppressive under the BCA, "[t]he court has discretion to determine which factors are pertinent to its evaluation of the quality and nature of the misconduct, but certain factors apply in most cases."
"Ordinarily, oppression by shareholders is clearly shown when they have awarded themselves excessive compensation, furnished inadequate dividends, or misapplied and wasted corporate funds."
In this case, the judge determined that the individual defendants misappropriated treasury shares "upon forming the LLC." He further stated "[t]he [individual] defendants[`] attempt to allocate 39.25 shares to themselves is a breach of their agreement with the plaintiffs and constitutes an act of oppression." Thereafter, the judge wrote:
The "action[s]" "outlined below" in the judge's opinion make it clear that he viewed the share misappropriation, whenever it precisely occurred, within the context of a much broader pattern of misconduct, all of which occurred: 1) after plaintiffs left the day-to-day operations of the Corporations; and 2) after MPI was formed as an LLC.
Based upon our reasoning, the actions of the individual defendants relied upon by the judge to place the misappropriation of treasury shares in the context of an "abuse of corporate power" were not cognizable claims of oppression, since MPI was formed on January 1, 2002. Only afterwards did plaintiffs lodge their complaints regarding the individual defendants' actions outlined by the judge. None of those complaints had anything to do with the allocation of shares or equity in MPI. Indeed, misappropriation of ownership interests by the individual defendants was never among the various reasons plaintiffs gave regarding their refusal to execute MPI's operating agreement.
The judge bridged the legal gap between any misappropriation of treasury shares in the Corporations and conduct that followed the formation of the LLC by relying upon our decision in
We concluded "[t]he dissolution . . . by [the] defendants was a transfer of the old business to the new corporation to the exclusion of [the] plaintiffs."
Notably, while we affirmed the trial judge's findings that the plaintiffs were oppressed shareholders because of the defendants' breach of their fiduciary duties, we disagreed with the remedy imposed by the judge.
We think
The judge's focus on conduct that occurred after the formation of MPI skewed his consideration of the facts supporting any cognizable claim of oppression under the BCA. Whether majority shareholder misconduct is oppressive under the BCA turns on whether the misconduct thwarted the minority shareholders' reasonable expectations.
Assessment of plaintiffs' reasonable expectations was essential to determining whether the individual defendants' conduct was oppressive.
The judge did not make specific findings as to plaintiffs' "reasonable expectations" beyond what was implicit, i.e., they assumed the treasury shares — reflecting 4.5% of the equity in the Corporations — would be retained by the Corporations and not be split by Markov and Kvitchko when MPI was formed.
Otherwise, the judge expressed plaintiffs' reasonable expectations only in general terms, i.e., the "corporate income or advantages [to] which . . . they were entitled." For the reasons discussed above regarding the general structure of an LLC and the preeminent role of the managing member, that general statement had no application to MPI once it was formed.
After they left in 1997, plaintiffs never anticipated having any role in the day-to-day operations of the Corporations or in MPI. They had no reasonable expectation that their particular individual ownerships interests were greater than 10%, for Tutunikov, and 7.5%, for Zurakhinsky. Nor did they reasonably expect that the treasury pool would result in any additional distributions to them; in their brief, plaintiffs conceded "[t]he distributions associated with 4.5% treasury shares stay with the company."
Additionally, we note that every tax return in the record, dating back to Miksoft's 1998 corporate return, showed the individual defendants each claimed more than a 37% interest in the Corporations. Plaintiffs denied knowledge of the returns, and the judge made no specific findings.
The proposed operating agreement contained capitalizations reflecting equity percentages of 39.25% for each individual defendant. As of January 1, 2002, when the operating agreement was circulated and plaintiffs refused to sign, they should have been aware that 4.5% of equity in the company had been distributed to the individual defendants without any pro rata distribution to them. Yet, plaintiffs' complaints did not surface until Markov's end-of-year report in 2003, when questions regarding his and Kvitchko's compensation arose. Importantly, no specific claim of share or equity interest misappropriation was raised.
Under all these circumstances, we conclude that whether the misappropriation of treasury shares occurred before the formation of MPI, or as the judge found "upon forming the LLC," standing alone, and in light of all the other evidence in the case, it cannot serve as the basis for a finding of shareholder oppression under the BCA. Instead, the appropriate relief was to determine plaintiffs' ownership interests in MPI. And, in this regard, we find no basis to disturb the judge's conclusion setting those interests at 10.45% for Tutunikov and 7.8375% for Zurakhinsky.
The judge found "plaintiffs were [the] prevailing parties in connection with their claim of oppression" under the BCA. He further reasoned:
The judge awarded $1,685,374 in attorney fees and costs, including: $100,000 for plaintiffs' expert; $19,745 for the mediator/discovery master; and most of the remainder to plaintiffs' three law firms.
The judge also reasoned that plaintiffs were entitled to pre-judgment interest pursuant to
We agree with defendants that no attorney fees can be awarded pursuant to the LLCA. And, having concluded that any misappropriation of treasury shares under the particular circumstances of this case was not shareholder oppression, there was no basis to award counsel fees and costs to plaintiffs. We vacate that portion of the judgment in its entirety.
We address the competing claims regarding the judge's determination of the "fair value" of plaintiffs' interests in MPI. Plaintiffs' expert opined MPI's value was $35.5 million; defendants' expert valued the company at $3.5 million. The judge rejected both opinions.
Instead, reviewing the terms of the Sage transaction, the judge found it "present[ed] valuation data which is less subject to the prejudices of the party experts and thus, presents information from which a more realistic value of the company may be determined." The judge continued: "Sage acquired 9.09% of MPI for $500,000 on October 31, 2005[,] which is the valuation date in this matter. The $500,000 investment indicates that the value of MPI prior to the investment was $5 million. . . ." The judge concluded that "the value of MPI and thus, the plaintiffs' interest in the company may fairly be determined by the Sage transaction."
Citing
As a result, the judge valued MPI at $6.75 million, which he calculated utilizing the Sage transaction's evaluation — $5 million — and adding 35%. The judge, however, rejected plaintiffs' request that he apply a "minority discount," finding "[t]o do so would . . . pay them for rights in the company they do not enjoy."
Defendants argue that Sage received other benefits, such as a seat on the board of directors and a liquidation preference, which evidenced Sage's willingness to pay more than it otherwise would have paid for an equity interest in MPI. They contend the actual value of MPI was $3.5 million, as testified to by their expert.
Defendants also argue that even if $5 million dollars was the market value of MPI, the judge should have applied the marketability discount and arrived at a value of $3.25 million.
Plaintiffs do not challenge the judge's use of a 35% marketability discount. In their cross-appeal, they argue that the judge erred because he failed to apply a minority discount to adjust for plaintiffs' lack of control over the LLC. Plaintiffs also contend that the judge made a simple mathematical error in applying the marketability discount to the value of MPI. They assert that the correct calculation would have considered Sage's offer to represent only 65% of the total value of MPI. To arrive at the proper value, the judge should have divided $5 million by.65, arriving at $7,692,307 as the proper value of MPI. Indeed, $5 million is 65% of $7,692,307.
The deferential standard of review that applies to factual findings by the judge in a non-jury trial "is particularly significant in valuation disputes, which frequently become battles between experts."
"A minority discount adjusts for lack of control over the business entity, while a marketability discount adjusts for a lack of liquidity in one's interest in an entity."
Initially, we reject plaintiffs' claim that the judge should have found that Sage's offering price contained an embedded minority discount. Sage obtained benefits — a seat on the board of directors; a liquidation preference; a right to invest additional funds at a preferred rate; and an opportunity to negotiate the terms of a new operating agreement for MPI-Delaware-beyond an equity interest in MPI. There was no error in denying plaintiffs' request in this regard. Similarly, we also reject defendants' claim that the Sage offer actually included a premium for preferred membership in the LLC.
The judge determined there was a marketability discount "embedded . . . in the Sage price[]" because "MPI [was] a non-publicly traded company." In
In this case, however, the judge utilized a marketability discount in valuing MPI, not in valuing plaintiffs' particular interests. This distinction is important.
Here, although the judge rejected the experts' valuation of MPI, both experts applied a marketability discount of 35% in assessing Sage's offer. As a result, we find no basis to disturb the judge's determination as to the fair value of MPI.
However, we agree with plaintiffs that the judge committed a mathematical error in applying the discount factor to the value of MPI. Based upon the judge's findings, the fair value of MPI was $7,692,307. Thus, the fair value of Tutunikov's interest was 10.45% of that value, or $803,846; Zurakhinsky's interest was 7.8375% of that value, or $602,885.
Lastly, we consider defendants' arguments regarding the scope of the judgment. They contend that entry of judgment against both the individual defendants
Plaintiffs having asserted no argument in their brief to the contrary, we agree that there can be no judgment against MPI-Japan, which was dismissed from the litigation on summary judgment, the judge having found there was no factual basis for any claim against it. However, we reject the balance of defendants' arguments.
Defendants' notice of appeal lists the October 28, 2010, order as the only one for which they seek review. That order resulted from plaintiffs' request for final judgment and sought the addition of pre-judgment interest, counsel fees and expenses to the amounts already determined to be the value of plaintiffs' interests in MPI, which were contained in the earlier June 24, 2010, order.
Defendants opposed the motion, challenging the amount of fees and costs contained in plaintiffs' counsel's certification and requesting the judge to permit payment terms. The judge, in an oral opinion placed on the record on October 15, 2010, concluded that all the requested counsel fees and litigation costs were reasonable. He also refused to enter any payment terms because defendant had not cross-moved for the relief, and he lacked "adequate information . . . to conclude that . . . the financial circumstances of the defendant corporation are such that payment cannot be made." The order makes no mention of payment terms.
Defendants did not move for payment terms until months later and after the appeal was filed. On May 11, 2011, the judge entered an order denying the request to enter payment terms and granting plaintiffs' turnover motion. Defendants never amended their notice of appeal. We refuse to consider the issue of whether the judge erred in denying payment terms or in entering the turnover order.
Defendants never opposed plaintiffs' request to enter judgment against both the individual defendants and the business entities, and against MPI-Delaware. They were fully on notice since the proposed order accompanied plaintiffs' motion. Having never raised the issue before the trial judge, we refuse to consider it for the first time on appeal. See
In sum, we reverse the judgment under review, and remand the matter to the trial court for entry of judgment in plaintiffs' favor in the amounts set forth in Section V above, plus an award of pre-judgment interest based upon the newly-calculated judgment amounts. The judgment shall not include MPI-Japan. We vacate the award of counsel fees and costs entirely. We do not retain jurisdiction.
This characterization of the posture of the case as it proceeded to trial is undisputed.
