Goodwin Attorney Loses Suit Against Partner Over Stock Buyback

A Delaware judge rejected a Goodwin Procter attorney’s claims that a Goodwin partner manipulated him into selling his shares in a biotech firm at a steep discount that ultimately lost him millions of dollars.

The Friday judgment appears to end a legal spat between Gilbert Menna and Andrew J. Weidhaas, two longtime Goodwin corporate partners who have practiced alongside each other at the Big Law firm for about three decades. The firm is not involved in the dispute and declined to comment.

Their fight revolved around Menna’s shares in MiraDx, a molecular genetics and cancer research firm co-founded by Weidhaas’ wife, Joanne Weidhaas, and for which Weidhaas serves as a director. MiraDx began developing and providing Covid-19 PCR tests in 2020.

Menna and Weidhaas and MiraDX did not immediately return a request for comment.

Menna, a former member of Goodwin’s management and executive committees, sued the Weidhaases and MiraDx last year, alleging they fraudulently induced him to sell his shares back to the company after it disclosed in 2020 that it began producing its own Covid-19 tests.

That same disclosure invited investors interested in selling their shares to contact Weidhaas. Menna, who first invested in the company in 2009, sold most of his at $2 per share after getting word from Weidhaas that certain tax exemptions were at risk of being eliminated the following year, he claimed in his June 2022 lawsuit.

Ten months later, the company issued another offer to purchase shares at $15 per share, the lawsuit said. Menna claimed that if he had held onto his shares and resold them at the later date, he would have earned nearly $6.9 million, roughly $6 million more than he received in the 2020 repurchase agreement.

Menna argued that MiraDx and the Weidhaases made a number of misleading statements as part of a scheme to give them more control of the company and a greater portion of its financial prospects.

Delaware Chancery Court Judge Morgan T. Zurn, however, found the Weidhaases’ disclosures were not misleading or deliberately manipulative. “Menna failed to identify any false or misleading representation concerning” any MiraDx stock tax-exempt status, Zurn wrote.

She also said the company did not make misleading statements about the COVID-19 test’s effect on the business, as alleged by Menna.

Beyond that, Menna was barred by an anti-reliance provision in the underlying stock buyback deal from suing the Weidhaases and MiraDx over breach of fiduciary duty and fraud, according to the judgment.

Menna, who has worked at Goodwin since 1987, moved into the role of counsel in October, according to his LinkedIn profile. Weidhaas, the former co-chair of the firm’s private equity practice, remains a partner, according to his website bio.

The case is Gilbert G. Menna vs Andrew J. Weidhaas, Del. Ch., 2022-0509, 7/28/23, D.C.C., No. 2022-0509, order filed 7/28/2023.