Southfield firm defends actions challenged in lawsuit by founder’s family
Pontiac — When Bloomfield Hills businessman Herbert Tyner died last August he allegedly owed his own company over $4.3 million in unpaid loans and had abused his position by taking more than a million dollars in improper benefits, according to Oakland Circuit Court documents.
The allegations are among those made Tuesday by Tyner’s longtime partner and cousin, Bernard L. Hartman, in response to a lawsuit filed this month against Hartman and the company by Tyner’s family.
Tyner died after a long illness at 84. He and Hartman co-founded the Southfield-based Hartman & Tyner Inc. in 1953, making a fortune in apartment buildings and property development and holdings. They later branched out to buy Hazel Park Raceway and picked up casinos and dog-racing tracks in Florida and West Virginia.
The Tyner family sued in Oakland Circuit Court, claiming Hartman reneged on a death-bed pledge to take care of Tyner’s widow, Suzanne, and keep business operations as usual.
Instead, according to the Tyner lawsuit, Hartman and a vice president, Daniel Adkins, were allegedly “lining their own pockets” with hefty pay raises and bonuses with nothing going to the Tyners, who were being squeezed out of business operations.
Both sides and their attorneys have declined to be interviewed regarding their respective allegations.
“We believe the Tyner family has been treated fairly,” Adkins said recently in a brief phone conversation from his office at the Mardi Gras Casino in Florida, one of several properties the company owns outside of Michigan
Adkins and Hartman insist they have done nothing wrong and under their oversight Hartman & Tyner “has enjoyed tremendous success” and recently made the largest distribution of profits to its shareholders, including the Tyner family, in the company’s 63-year history.
The company — which has about 2,000 workers in Michigan and elsewhere — has declined to disclose its profits or the company’s net worth, estimated well into the tens of millions of dollars.
Tuesday’s filing says:
■ The Tyners’ “meritless” lawsuit is an effort to have them bought out at an inflated price.
■ There never was a promise to Suzanne Tyner on her husband’s deathbed.
■ A management agreement, created at the insistence of the late Tyner, provided for Hartman and Adkins to manage the companies as surviving officers and directors.
■ If Tyner’s legacy has been tarnished in any way, as his family alleges, it’s because of “his behavior during his life and by his long-standing abuse of his officer position in H&T” including ill-gotten benefits in excess of a million dollars.
The Hartman and Adkins response said if anyone has disproportionately enjoyed benefits, it was Tyner and family members “living rent-free at H&T properties” including a Florida home.
Over several years the company made loans to and for the benefit of Tyner, primarily to buy life insurance policies.
Tyner promised to repay the loan, which at the time of his death amounted to over $4.3 million, according to the filings, which allege “Tyner hid such improper benefits from Mr. Hartman” and the family has refused company demands to repay the amounts in question.
The Tyner family has expressed concern about how Deborah Tyner, who had power of attorney for her father, had been kept in the dark about company business. After his death, the Tyners said Herbert Tyner’s office was “boxed up” and Deborah Tyner, a former Oakland circuit judge, was denied an after-hours alarm code to allow her access to the building.
The response said during the four years of his illness, Tyner never discussed with either Hartman or Adkins that any of the children should be involved in management of the company and made no efforts to include them before or after his death.
“In fact, he told Mr. Hartman and Mr. Adkins (and others) on several occasions that ‘Debbie Tyner does not run this company and is not going to run this company,’ ” according to Tuesday’s response.
Hartman and Adkins said Deborah Tyner never had any formal involvement with the company, but she was provided with information about corporate operations out of respect for her position as a representative of the Tyner family.
The response said Tyner’s office and belongings were removed from desk drawers and file cabinets were boxed up at Deborah Tyner’s direction and she was denied access after concerns about how she treated H&T personnel.
The response said more than $1.5 million in compensation and bonuses paid to Hartman and Adkins was earned and that Herbert Tyner was compensated as an officer through the date of his death. No Tyner family member was ever entitled to be paid a salary, bonus or other employee compensation after his death, according to the response.
The response asks that the Tyner lawsuit be dismissed and that the family or Tyner’s trust repay the loans and “ill-gotten benefits” and all attorney fees in the case. It also asks that the families be bound by a management agreement and a buy-sell agreement formulated before Tyner’s death in which any shareholder desiring to sell stock must first offer it to the company and other shareholders at a price determined by the company’s accountant.
That could be sizeable. The Tyners control 50 percent of the stock.
The lawsuit is assigned to Judge James Alexander.