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Rating:Fragasso V. Rydex Case Gridlocked Over Jurisdiction Not Rated 3.0 Email Routing List Email & Route  Print Print
Thursday, October 25, 2007

Fragasso V. Rydex Case Gridlocked Over Jurisdiction

Reported by Erin Kello

Things are progressing acrimoniously in the case of Phil Fragasso v. Rydex Holdings, as the two parties continue to bicker over scheduled depositions and a possible change of venue.

On September 19, counsel for Rydex filed a motion to quash discovery proceedings by Fragasso and team, claiming that it would undercut their motion for change of venue if Rydex and Security Benefit executives were to give depositions in a Massachusetts courtroom. Also, Rydex's lawyers argued that the rules to which those depositions are subject are also in question because the venue issue has not yet been ruled upon.

In turn, Fragasso's lawyers fired back, arguing that Rydex is not even sure what it wants out of the jurisdictional hearings, evidenced by its concurrent arguments that it is not subject to Massachusetts law and a motion to dismiss all charges in Massachusetts.

Fragasso's lawyer, Rachel Lipton writes, "Notwithstanding Rydex's apparent confusion with respect to this issue, this action currently remains pending in the United States District Court for the District of Massachusetts, with all applicable procedural rules in force."

Individuals scheduled to give depositions in the trial include: Robert Viragh, chairman of the board at Rydex; Carl Verbencouer, CEO; John Bachman, vice president of Human Resources; Roger Young, principal of Young Brophy & Duncan; and Kris Robbins, chairman, president and CEO of Security Benefit.

Fragasso is suing over a promise by Verbencouer that he would receive an additional 30,000 "Executive Participation Units" for signing a non-compete agreement in June of 2006, 20,000 of which would be rewarded by June 2007 and the additional 10,000 in June of 2008, providing Fragasso was still employed by Rydex.

Also, Fragasso claims that Verbencoeur told him that if Rydex was sold before these milestones were reached, he would "do the right thing" and accelerate the award. The added units are said to be worth $1.3 million, according to court papers.

No further hearings have been set yet in the case.  

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