January 31, 2011 Pohnpei, FSM-On November 30, 2010, FSM Telecommunications Corporation (FSMTC) as shareholders of Island Cable TV Pohnpei, Incorporated (ICTV) filed a complaint at the FSM Supreme Court against Bellarmine and Bernie Helgenberger ('individual defendants') doing business as Bernards, ICTV, Central Micronesia Communications, Inc. (CMC), and Bernard's Enterprises, Inc. Among other things the complaint alleges that even though FSMTC is a 50% shareholder of ICTV, FSMTC has been effectively shut out of the business decisions of ICTV since approximately 2003 and that the "individual defendants," distributed $30,000 to their own business(es) without approval by the ICTV Board of Directors which includes two members of FSMTC.
FSMTC says it has wanted to expand television services throughout the island of Pohnpei since it first became a shareholder of ICTV in 1998 "in order to meet the aspirations and expectations of the people of Pohnpei as expressed in Pohnpei Legislature Resolution, LR No. 128- 02". The complaint FSMTC filed says that the 'individual defendants "have blocked expansion and been content for Defendant ICTV to serve a fraction of the population of Pohnpei covering only the Kolonia and nearby areas and have been unwilling to join in the investments necessary to expand services."
FSMTC says that the issue regarding expansion of television services in Pohnpei has been a basic problem between the shareholders since at least 2003.
The FSMTC complaint alleges that since approximately 2003, the 'individual defendants' and their businesses "have taken control" of ICTV and that they "manage, control and make all decisions regarding ICTV to the exclusion of Plaintiff FSMTC. The office spaces rented by ICTV are owned by Defendant Bernards and/or Defendant Bernard's Enterprises, Inc., entities owned and controlled by the 'individual defendants,' and all financial matter related to ICTV are made by or under the direction of the 'individual defendants.'"
In 1998 FSMTC purchased 50 percent of the shares of ICTV from the United Micronesia Development Association, Incorporated for $450,000. The remaining 50 percent of those shares was and still is owned by CMC.
The ICTV Board of Directors is supposed to consist of five people but since the late 1990's there have only been four. For the first few years an agreed upon arrangement between the two shareholders, FSMTC and CMC provided that two members would be appointed by the management of FSMTC and two members would be appointed by the management of CMC. A fifth neutral member was to be agreed upon by FSMTC and CMC.
Peter Sinclair, "an experienced television executive in the Mariana Islands" served as the fifth neutral member for a short time after 1998, but since Sinclair's departure in the late 1990's the shareholders have been unable to agree on a fifth director. The remaining members have remained deadlocked in a two to two vote on any business matters since that time including matters of the expansion of television services in Pohnpei.
The FSMTC complaint alleges that since 2003 the 'individual defendants' have been treating ICTV "as if it were their own personal business." They stopped calling shareholder and board meetings, stopped consulting with ICTV regarding decisions of ICTV, "and in all other ways prevented Plaintiff FSMTC from participating in Defendant ICTV as a meaningful shareholder."
The complaint says that no ICTV shareholders meetings have been held since 2003. At that last meeting the shareholders were deadlocked and were unable to elect a fifth, neutral director capable of breaking the deadlock. FSMTC has been requesting that a shareholders meeting be convened since mid 2004 without success.
The complaint also says that at some point in time the 'individual defendants' distributed $30,000 in ICTV or other assets to Bernards or Bernard's Enterprises without shareholder or board approval in violation of the corporation law of Pohnpei State and the Federated States of Micronesia.
Most recently, after FSMTC took matters into its own hands and gave notice of a shareholders meeting to be held on November 26, 2010, Bellarmine and Bernie Helgenberger are alleged to have directed the ICTV manager to telephone FSMTC approximately 20 minutes before the meeting was scheduled to begin to say that they had "unspecified 'other commitments.'" Executive Secretary, Pedra Kanichy swore an affidavit to that effect.
The complaint says that the 'individual defendants' and CMC "have engaged in a pattern of conduct which constitutes illegality, oppression, misappropriation, misuse, diversion and waste of assets, and a conflict of interest with respect to the commercial dealings between ICTV and Bernards and/or Bernard's Enterprises, Inc., businesses controlled and managed by Bellarmine Helgenberger and/or Bernie Helgenberger."
According to filed exhibits, since 2003, FSMTC has repeatedly requested financial statements from ICTV and the 'individual defendants' but they have "failed and refused to produce such records."
FSMTC is asking that the court dissolve Island Cable TV, Incorporated; to assign a Receiver to liquidate the assets of ICTV to the shareholders in an amount to be determined by the FSM Supreme Court after causes for action are considered; to issue an order compelling the Receiver to distribute dividends to FSMTC; to award FSMTC compensatory and punitive damages against the Helgenbergers and CMC in favor of FSMTC in the amount the court determines at trial; compensatory and punitive damages in favor of ICTV in the amount determined at trial; attorneys fees and costs of suit; and "such other and further relief as this Honorable Court may deem just and proper."
Bellarmine Helgenberger pro se, meaning he is representing him responded to the complaint on behalf of all defendants and denied all of the allegations in FSMTC's complaint. He listed six defenses 1) Because of FSMTC's direct and indirect participation in the affairs of ICTV without previous protest they have no right to complain now; 2) John Sohl and Takuro Akinaga at their request were paid $50,000 as dividends on behalf of FSMTC; 3) As shareholders, both parties were always made aware of scheduled company meetings and were present at the scheduled meetings, and consented to holding the company meetings; 4) FSMTC ratified the acts and decision of the management; 5) Plaintiff failed to act within a reasonable time in making its objections; and as such 6) Plaintiff waived its rights.
However, Attorney Fred Ramp who is representing FSMTC filed a motion to quash that answer because while Bellarmine Helgenberger is within his rights to represent himself he cannot serve as an attorney for any of the other defendants because he is not a licensed attorney.
Further Ramp argued in his motion that Bellarmine "not only cannot properly represent Defendant ICTV, but also cannot select the attorney who will represent Defendant ICTV as it would be a conflict of interest." He said that ICTV needs to be represented by an attorney selected by its shareholders, FSMTC and CMC. However, those two shareholders are unable to agree on important matters related to the corporation and because CMC will neither call a shareholders meeting nor participate in one called by FSMTC a matter that is part and parcel of FSMTC's complaint. Ramp requested the Court to appoint an entirely neutral attorney to represent ICTV.