PulteGroup lawsuit seeks info on Twitter scandal
A woman who says she is a PulteGroup Inc. shareholder is suing the Atlanta-based homebuilder after she says the company failed to provide requested books and records connected to the firing of an executive accused of harassing the grandson of the company's founder on Twitter.
The PulteGroup, however, says it hasn't received proof the plaintiff is a shareholder.
In December, Brandon Jones, the company's senior vice president of field operations, was fired after an investigation determined he'd violated the company’s code of ethical business conduct. He had been charged to take over as chief operating officer in a matter of weeks.
Bill Pulte, the Twitter philanthropist and grandson of the late William J. Pulte — who founded the firm in Detroit in the 1950s — had sued Jones in a defamation lawsuit, accusing him of holding a grudge against him and using several fake Twitter accounts to harass him and other Pulte family members.
Betty Trester of Beavercreek, Ohio, is a shareholder, according to the new lawsuit filed in Ingham County's 30th Circuit Court. She is suing to gain access to multiple records in connection to the investigation and events that followed and for attorneys' fees.
Trester seeks the King & Spaulding LLP report from the investigation into Jones, presentations and communication to the board about it and documents reviewed by the law firm in the investigation.
She also seeks communications about the Pulte family, the deletion of Executive Vice President Todd Sheldon's Twitter account, his behavior regarding the company's code of conduct, the establishment of a firewall and independence between the board and company executives and the termination of Jones and Michelle Hairston, the senior vice president of human resources.
"This," Marc Newman, Tester's attorney, wrote in the lawsuit regarding Hairston's firing, "and other media reports suggest pervasive misconduct by Senior Management, and the failure of the Board to properly oversee their conduct."
The demand was sent on March 15, according to the complaint. And despite, "extensive efforts to respond to various requests and concerns raised by counsel for the Company," Newman wrote, "the Company has not made the requested books and records available for inspection."
The company, however, disputes that claim.
"PulteGroup values the trust shareholders place in our company," spokesman Jim Zeumer said in a statement. "As such, we responded multiple times to this inquiry and actively worked to validate the request for information. Despite our ongoing requests for even basic information, the plaintiff’s law firm is unable or unwilling to provide appropriate proof their client owns stock in PulteGroup required by Michigan law.
"We are willing to work toward an appropriate resolution and implore all parties involved to do the same. In working on behalf of all shareholders, we will follow the applicable laws as clearly defined but we must also defend against unlawful access to confidential information to further their — or a third party’s — objectives unrelated to the proper interest of a shareholder."
Trester's attorney objected to the company's claim. A photo of a March financial statement lists Trester as holding equity in the company, though the amount was redacted.
“Ample proof of Ms. Trester’s shareholder status has been provided multiple times," Newman said in a statement. "We satisfied all their requirements and gave them every reasonable opportunity to comply.”
The lawsuit also raises questions over the company's ability to qualify Atlanta-based King & Spalding as providing independent investigators because the firm has represented the company and its leaders in the past. It notes Bill Pulte wasn't interviewed by the company and asserts he has evidence that the company didn't review.
Pulte sat on the company's board from 2016 to 2020 and is CEO of Pulte Capital Partners LLC investment firm. He's known as a Twitter philanthropist, frequently giving away money on the platform.
"These circumstances," Newman wrote about the issues in the complaint, "raise serious questions about the Company's internal controls and the board's oversight of the CEO and incoming COO."
bnoble@detroitnews.com
Twitter: @BreanaCNoble