A local human resources firm is suing the estate of its former CEO who suffered from brain cancer, accusing him of trying to undermine the company in a power play before dying earlier this year.
St. Petersburg-based Human Resources Inc. (HRI) offers outsourced human-resources services — payroll, benefits management, unemployment, health insurance and retirement planning and more — to corporate clients.
Rosser “Ross” Adams Malone founded HRI in 1997; he died in 2003. That same year, Ross’s widow Judith Malone, now 70, became HRI’s vice president and sole minority shareholder; Ross’s son-in-law Richard “Scott” Buchanan became CEO and majority shareholder.
Buchanan was married to Ross’ daughter, Carolyn Malone Buchanan, now 55.
In 2017, Scott Buchanan died of brain cancer, and the personal representative of his estate is attorney Kennan “Ken” Dandar.
Diagnosed with brain cancer in 2014, Scott Buchanan took an extended leave of absence, during which time HRI continued paying him a full salary.
Later, Judith Malone — then vice president and co-owner of HRI — told Buchanan in mid-2016 the company could no longer afford to pay the salary, which Buchanan apparently did not take well.
According to a suit filed July 28 in Pinellas County Circuit Court, Buchanan allegedly withdrew company funds to cover his salary and attorney’s fees for his legal team, which included Dandar, who is listed as a defendant.
Buchanan is also accused of several subversive acts at HRI: An attempt to wrest control of the company and its board from Malone; recording and videotaping employees without consent; shutting down the company’s server during a critical year-end period; firing many of the existing staff, bringing on an entirely new staff and forcing out the company’s longtime CPA and chief financial officer.
The resulting chaos purportedly caused HRI to lose key staff, clients, and a considerable amount of money.
HRI is blaming Dandar for negligence, breach of fiduciary duty, misappropriate of corporate assets, and tortious interference with business relationships.
While HRI is the listed plaintiff, the action was likely filed in cooperation and with the encouragement of majority shareholder Judith Malone. If so, it will not be the first suit she orchestrated.
Court records show Malone personally filed two suits against Dandar and a claim against son-in-law Scott Buchanan’s estate in 2017 and filed suit against Buchanan himself in 2016.
A noteworthy signal from HRI’s behind-the-scenes disarray is a “Letter from our CEO” which is still on the company’s website despite being more than a half year since Scott Buchanan died.
