PORTLAND, Maine — Cate Street Capital’s chief executive John Halle continues to fight a 14-year legal battle over a New York judge’s ruling that he owes $1 million to a former business partner. The case moved to Maine last year, amid allegations that Halle shifted ownership of properties in the state in an effort to avoid paying.
The former business partner, Richard Davimos, in April received court permission to collect from Halle more than $2.3 million, which is the judgment plus interest.
As president and CEO of Cate Street, Halle has spearheaded a $140 million wood pellet project in Millinocket. The New Hampshire-based investment company purchased mills in Millinocket and East Millinocket in 2011, both of which are subject to Internal Revenue Service liens for unpaid taxes. The company, which is in line for a $16 million F inance Authority of Maine loan, also owes back taxes to both towns.
In a prepared statement, Cate Street emphasized the legal dispute is a personal matter unrelated to its business.
The judgment against Halle stems from separate business dealings related to financing of the 2001 film “ My First Mister.” According to a 2006 decision in New York, Davimos claimed Halle had guaranteed his loan of $1 million to the project and that the loan was not repaid. In 2009, the Supreme Court of the State of New York Appellate Division awarded Davimos $1 million plus interest in the case against Halle.
That judgment was moved to Maine last year, and the Maine Superior Court in April gave permission to Davimos to move ahead with collection efforts against Halle’s personal property and real estate in Maine. That permission had been on hold since 2013, pending resolution of continued litigation over the appellate court’s decision in New York, according to an order by Maine Superior Court Justice Joyce Wheeler.
“Now we are able to enforce that in Maine because that’s where we think the bulk of his assets are,” Portland-based attorney Lee Bals, representing Davimos, said in a telephone interview.
Bals said the process of collections is still in an early stage.
“What we are doing is simply exploring all of Mr. Halle’s assets and as part of that exploration we are having to look into what his various affiliations are with his numerous companies,” Bals said. “We are in a discovery mode trying to understand how Mr. Halle’s financial world has been constructed by his many lawyers.”
Halle’s attorney, Brian Champion, declined to comment on specifics of the case.
“This is a personal dispute between Mr. Halle and Mr. Davimos that’s going back almost 14 years and I can’t really comment on it as it’s an ongoing lawsuit,” Champion said.
Cate Street Capital provided the following company statement in response to a request for comment on the lawsuit:
“This is a long-standing and ongoing personal legal matter between Mr. Halle and Mr. Davimos going back over 13 years. We cannot comment on the lawsuit as it is pending, but it is important to note it does not involve Cate Street Capital. Mr. Halle’s full focus at this time is on creating opportunities for economic growth in Maine and putting Maine people to work.”
According to a court transcript, Davimos’ attorney in the New York case, Damien Pietanza, said in a May 2013 hearing in that state that $30,000 had been collected from Halle following the 2009 judgment. Bals said Friday morning that no more payments have been made to his client.
Apart from the collections efforts, Davimos has filed a complaint in U.S. District Court in Maine, alleging that Halle fraudulently transferred ownership of a Falmouth home and management of two corporate entities to his wife, Sharon, in order to evade payment.
Halle’s attorneys sought to dismiss those federal claims last year, a motion U.S. District Court judge George Z. Singal dismissed in September, writing that “ the court will not try this case on a motion to dismiss.”
Halle in March declared an intent to prevent that case from going to trial by seeking summary judgment from the court in relation to two alleged violations of the Maine Uniform Fraudulent Transfer Act. The court on April 10 set a June 11 deadline for Halle to file that request for summary judgment.
At issue in that case are Davimos’ claims that while indebted to him, Halle transferred a membership interest in JH North Hampton Group and in Jenis Holding Co. LLC to his wife. New Hampshire corporate filings indicate JH North Hampton is incorporated in Delaware and Jenis Holding Co. is incorporated in Florida. Both JH and Jenis list their business addresses as 1 Cate St., Portsmouth, N.H., Suite 100, the same address listed in an April 2 annual filing in New Hampshire for Cate Street Capital.
Davimos’ U.S. District Court complaint in Maine includes a third allegation of fraudulent transfer, claiming Halle in 2005 transferred the couple’s Falmouth home for “ no consideration.” Halle’s attorney is seeking summary judgment on the last two matters, arguing that Halle never had an interest in Jenis Holding Co. and that the 2005 real estate transaction is beyond the statute of limitations for fraudulent transfer.
Davimos’ Maine attorney, Bals, said Friday that he expects collection efforts to continue and the fraudulent transfer case to proceed to trial at a date to be determined.