ALBEE v. ALBEE

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

PAUL ALBEE, individually and derivatively :

on behalf of Aromatic Fusion, Inc. : CIVIL ACTION

:

v. : NO. 21-3984

:

ERIC ALBEE and WHITE BEAR TRADING :

COMPANY and AROMATIC FUSION, INC. :

______________________________________________________________________________

AROMATIC FUSION, INC. and ERIC ALBEE :

:

v. :

:

MARY ANN ALBEE, SANDRA ALBEE :

KEELEY and P3n TECHNOLOGY, INC. :

MEMORANDUM

Chief Judge Juan R. Sánchez February 14, 2024

This is a shareholder derivative action initiated by Paul Albee, the minority shareholder in a

family business, against his son Eric, the business’s majority and only other shareholder, and White

Bear Trading Company, for usurpation of corporate opportunity, tortious interference with existing

and prospective contractual relations, breach of fiduciary duty and unjust enrichment. In response,

Eric Albee filed counterclaims against his father and a Third Party Complaint against his mother,

Mary Ann Albee and his sister, Sandra Albee Keeley, raising the same and other, similar claims.

Following a non-jury trial and in accordance with the following factual findings, the Court shall

enter judgment in favor of Paul Albee individually and derivatively on behalf of Aromatic Fusion,

Inc. against Eric Albee and White Bear Trading Company on the Complaint, and in favor of Paul

Albee, Mary Ann Albee, Sandra Albee Keeley and P3N Technology, Inc. against Eric Albee and

Aromatic Fusion, Inc. on the Counterclaim/Third-Party Complaint.

FINDINGS OF FACT

1. Plaintiff Paul Albee is an adult individual residing at 409 Sergeant Drive, Lambertville,

New Jersey 08530. Compl. ¶ 2, ECF No. 1; Def.’s Ans. ¶ 2, ECF No. 18.

2. Defendant Eric Albee is an adult individual residing at 640 NW 28th Court, Wilton

Manors, FL 33311. Compl. ¶ 3; Ans. ¶ 3.

3. Aromatic Fusion is a corporation organized and existing under the laws of the State of

New Jersey with its only place of business at 3185 Tucker Road, Bensalem, Pennsylvania 19020.

Compl. ¶ 6; Ans. ¶ 6.

4. Aromatic Fusion Inc. (“AFI”) was incorporated and registered with the State of New

Jersey on March 5, 2003 by Eric Albee and Sandra Albee Keeley, each of whom owned 50% of

the corporation and were identified as officers and directors of AFI. N.T. 6/12/23, 54-56, 62-63;

Ex. 1. Eric Albee was identified as AFI’s President, and Sandra Albee Keeley was identified as

the Treasurer and Secretary. Id. at 57-58; Ex. 40.

5. AFI is in the business of developing and supplying fragrances, air care products and air

neutralizers, additives and modifiers for plastics, and additive concentrates. Second Am.

Counterclaim of Eric Albee ¶ 8, ECF No. 35; Ans. of Paul Albee to Second Am. Counterclaim ¶

8, ECF No. 36; N.T. 6/12/23, 53.

6. Paul Albee is the father of Eric Albee and Sandra Albee Keeley. Mary Ann Albee is the

wife of Paul Albee and the mother of Eric Albee and Sandra Albee Keeley. Second Am.

Counterclaim of Eric Albee ¶ 15; N.T. 6/12/23, 49-51; N.T. 6/13/23, 114-115.

7. White Bear Trading Company (“White Bear”) is a limited liability company organized

and existing under the laws of the State of Florida. White Bear was registered with the State of

Florida on October 24, 2016, at which time its address was 6971 North Federal Highway 400,

Boca Raton, FL 33487. Compl. ¶ 4; Ans. ¶ 4; N.T. 6/13/23, 120; Ex. 4.

8. The principals/owners of White Bear are Eric Albee and Ryan Willits, a Florida attorney.

Eric Albee owns 60% of White Bear and Ryan Willits owns 40%. N.T. 6/13/23, 121-122; Ex. 4.

White Bear’s business focuses on facilitating the production of something which another person

or entity asks it to produce – it does little work developing its own new products. Included among

the types of products White Bear assists in producing and selling are products which disburse

fragrances. N.T. 6/13/23, 122-23.

9. Much of the initial work to launch AFI consisted of soaking fragment material in

fragranced oil, and Eric Albee did most of this work himself in his basement until AFI moved to

its Bensalem, Pennsylvania location. N.T. 6/12/23, 70-71; N.T.6/14/23, 16. AFI’s first customers

were EES, Aroma Terra, and Liz Claibourne. While Eric Albee handled the soaking processes

and marketing, Sandra Keeley took orders and shipped bags. N.T. 6/12/23, 70-71; N.T. 6/14/23,

17-18.

10. Whereas AFI primarily handled fragrances, fragrance delivery systems, and fragranced

pellets, over time it also developed an “additive” side to its business, focused on the development

of additive concentrates for the plastics industry which help process plastics better thereby making

them lighter and less costly. N.T. 6/12/23, 101-103, 193. Although there was no separation in the

company’s books and records between the two, the “additive side” of AFI often did business as

“Addisperse.” Id.

11. The additive side is distinct and different from the fragrance side of AFI’s business.

N.T. 6/12/23, 192. The raw materials and buying of raw materials, the processing, and customer

bases are completely different, and most of the products on the additive side are handled “in-

house.” On the other hand, because the fragrance products were often injection molded, AFI would

have to outsource some or all the manufacturing for its fragrance-side products. Id. 192-193, 196-

199. Eric Albee was focused primarily on generating business and developing sales for the

fragrance side of AFI. Paul Albee, who had a bachelor’s degree in chemistry from Drexel

University and spent most of his career in the chemical polymer industry, focused his energies on

research, development, and business generation for the additive side. Id.; N.T. 6/14/23, 145.

12. Throughout AFI’s history, its officers, directors, and/or shareholders (Eric Albee, Sandra

Albee Keeley, and Paul Albee) did not have formal meetings, although they would talk about

business over coffee. N.T. 6/12/23, 57. From time to time, some corporate formalities were

observed, such as taking minutes, passing corporate resolutions, amending bylaws, and adding the

resulting documents to AFI’s minute book. Id. at 57-62, 69-70. Updating the minute book was a

joint responsibility shared by Eric Albee and Sandra Keeley. Id.

13. In 2009, AFI began selling a product called the “Scentbug,” a battery-operated, egg-

shaped device with a drawer into which a fragrance medium was placed, and a fan which pulled

air past the fragrance and diffused it into the air. N.T. 6/12/23, 72; N.T. 6/13/23, 129; N.T. 6/14/23,

50-51. There were several variations of the Scentbug, and it was sold in different shapes like

turtles, animals, or snowmen. The product was developed by AFI for, and sold by, Bath and Body

Works; the various shapes were designed by Wealthy Lane, a company in Hong Kong, and

manufactured in China. N.T. 6/13/23, 129-130. In 2009, the Scentbug resulted in significant

orders for AFI, one of which was for $2.5 million. N.T. 6/12/23, 71-76.

14. In 2008 and 2009, when the Scentbug opportunity was first offered, AFI did not have the

capital or financing in place to take on the project. N.T. 6/12/23, 82; N.T. 6/13/23, 132-134.

Despite having the promise of significant orders from Bath & Body Works, AFI’s bank refused to

provide the financing needed to support the project, so AFI worked instead with a company which

agreed to provide financing in exchange for AFI selling it some of its receivables. N.T. 6/12/23,

82-83.

15. In 2009, AFI had $4,036,245 in sales, and in 2010, its sales totaled $5,242,246. Ex. 25.

In March 2010, AFI secured two $250,000 lines of credit with Univest Bank to help fund its efforts

to develop a solid gel for use in producing car air fresheners and other scented products. N.T.

6/14/23, 26-27. Because Sandra Keeley did not have good credit and was unwilling to sign as a

guarantor, she relinquished 42% of her shares in AFI to Paul Albee so he could co-guarantee the

loan with Eric. N.T. 6/12/23, 61-62; N.T. 6/14/23, 27-28. Thereafter, Eric Albee became the

majority shareholder of AFI with his 50% ownership interest, Paul Albee owned 42%, and Sandra

Keeley owned 8% of the company. 6/12/23, 61-62; Ex. 33.

16. Harry Slatkin was an employee of Bath and Body Works who was also affiliated with a

separate entity, Slatkin & Company, through whom Bath and Body Works branded the Scentbug

pursuant to a contract. Id. at 73. Charles Ye was AFI’s primary contact at Wealthy Lane, and Mr.

Hong was the primary contact with Yong Zin Plastic and Metal Hardware, the Chinese company

which manufactured the product. Due to language barriers, Charles Ye usually handled the

communications and interactions with Mr. Hong on behalf of AFI and Slatkin. Id. 75-78; N.T.

6/13/23, 130. There were several meetings at AFI’s Bensalem location between Eric Albee, Paul

Albee, Sandra Keeley and both Hong and Ye. N.T. 6/12/23, 78; N.T. 6/13/23, 130-131.

17. Sales of the Scentbug began dwindling in 2011, and at or around this same time, Bath

and Body Works parted ways with Harry Slatkin. N.T. 6/13/23, 89-90, 134; N.T. 6/14/23, 22.

Thereafter, the Scentbug was branded only under the Slatkin and Company name, and Bath &

Body Works dropped it from its product line. N.T. 6/12/23, 73, 81-82; N.T. 6/13/23, 134.

18. In 2011, AFI’s annual sales totaled $1,904,115, and in 2012 and 2013, its annual sales

declined to slightly more than $1.1 million in each year. N.T. 6/12/23, 80-82; Ex. 25. In 2014,

AFI’s annual sales dropped below $1 million and its sales continued to decline in the following

years. In 2019, AFI’s sales totaled just $472,718. Ex. 25. The Albees attributed much of the

decline to Bath & Body Works having eliminated the Scentbug from their product line when they

separated from Harry Slatkin and Slatkin & Company. N.T. 6/12/23, 82; 6/14/23, 30.

19. AFI’s first line of credit was eventually converted to a small business loan and paid

off. Id. at 27. The second line of credit was initially secured by Eric Albee and his then-husband’s

property in New Jersey. N.T. 6/13/23, 195. In 2014, however, Eric Albee divorced, sold the

property securing the loan, and moved to Florida. N.T. 6/14/23, 160-161. Because Univest

refused to use Eric Albee’s property in Florida as collateral to secure the credit lines, Paul and

Mary Ann Albee agreed to guarantee and secure the loan with their residence in Lambertville,

New Jersey. N.T. 6/13/23, 195-196; N.T. 6/14/23, 28.

20. Among Eric Albee’s responsibilities as President of AFI was sales and business

generation. N.T. 6/14/23, 159-160. In 2014, Eric Albee had been expending less effort with

respect to generating new business and making sales on behalf of AFI, but he and his father

nevertheless agreed he could split his time between Florida and AFI’s Bensalem location after he

moved, so long as he would also continue to make sales calls and develop AFI’s business when he

was in Florida. Id. at 160-161; N.T. 6/12/23, 48.

21. Despite his assurances to his father, Eric Albee became more and more disengaged from

the business of AFI after he relocated, and his trips to Pennsylvania became less and less frequent.

N.T. 6/12/23, 47-48; N.T. 6/14/23, 161-162. On those occasions when he did come to Bensalem

to work, he spent most of his time behind his closed office door, interacted less with other AFI

officers and employees, generated fewer sales, and developed fewer business opportunities. N.T.

6/12/23, 103-104; 6/14/23, 161-162.

22. In 2016, after Harry Slatkin’s non-compete period following his separation from Bath &

Body Works expired and he was able to start developing his own products, AFI became involved

in development work on a Slatkin project known as “HomeWorx.” N.T. 6/12/23, 83-84; N.T.

6/13/23, 134-136. Specifically, AFI began working with fragrances and gel material and doing

design work on a little gel disc to be used in warmers, and a battery-operated pillar candle with

fan. N.T. 6/12/23, 84; 6/13/23, 136. Slatkin incorporated HomeWorx LLC in 2016 and it became

the entity taking and issuing orders and paying invoices in conjunction with the project.

HomeWorx LLC anticipated selling its products through the QVC home shopping network. N.T.

6/12/23, 84-85; N.T. 6/13/23, 135-137; N.T. 6/14/23, 53-54; Exs. 3, 5.

23. Several product ideas and concepts were discussed with Harry Slatkin for the

HomeWorx/QVC project(s). Among these were an ornament like the Scentbug that could be hung

on a tree but utilized the little gel discs instead of a pad with scented oil, a small floral petal molded

piece, a flameless candle, a little ball with a hook on top with a fan-based device, and a cube

diffuser. N.T. 6/14/23, 53-59. Nearly all these product concepts were revived and/or revisited

ideas and designs which AFI had previously done for other customers, including Bath & Body

Works. Id.; N.T. 6/12/23, 89-93; Exs. 6, 8, 9, 10.

24. Although AFI originally hoped to be able to produce its products for HomeWorx in the

United States, because of the anticipated volume of products that would be needed to fill orders,

AFI and HomeWorx agreed that manufacturing would be done in China using the same factory

(Hong’s) previously used for the Scentbug. Again, Charles Ye and Wealthy Lane would operate

as intermediary between AFI and the factory. 6/12/23, 93-96, 197-203; N.T. 6/14/23, 60.

25. On December 16, 2016, Eric Albee forwarded to Sandra Keeley an email he had received

from HomeWorx representative Jimmy Lefevre which had been sent to Eric’s personal Gmail

account attaching a “Vendor Set Up Form” for completion. Lefevere stated, “in order to receive

orders from QVC,” AFI “had to be set up as a supplier” with HomeWorx LLC. N.T. 6/12/23, 85;

N.T. 6/13/23, 141-142; Ex. 5. On December 22, 2016, in response to Lefevere’s request, Sandra

Keeley prepared the form for AFI which named Eric Albee as the contact for AFI and listed Eric’s

office and mobile telephone numbers and his AFI email, ealbee@afi-global.com. Sandra’s email,

skeeley@afi-global.com was listed as the “finance email address.” N.T. 6/12/23, 86-88; N.T.

6/13/23, 142-143; Ex. 13.

26. Additionally, the Vendor Set Up Form identified the factory that would be doing the

manufacturing of the products for HomeWorx, and provided the payment terms: a 30% deposit

with 70% due upon shipping. This meant the customer would be making a 30% deposit with AFI,

and AFI would pay that money to Wealthy Lane who would then work with the factory to have

the products made. 6/12/23, 86-88, 94-95; N.T. 6/13/23, 142-143; Ex. 13.

27. By the time the discussions concerning where the manufacturing would be done took

place, nearly all work for the HomeWorx project had been completed by AFI, and the only thing

left was for final orders to be placed. N.T. 6/12/23, 86-95, 196-203; N.T. 6/13/23, 144-151; N.T.

6/14/23, 185-189; Exs. 6, 8, 9, 13. However, AFI didn’t have the financing needed to put down

the 30% deposit required by the factory before it would begin manufacturing. N.T. 6/12/23, 97,

203-205; N.T. 6/14/23, 60-61. AFI also still owed the factory a receivable from having it

manufacture fragrance cubes created for Menards, a company in the Midwest which then failed to

order them. Id. This resulted in the cubes sitting on AFI’s shelves for years. N.T. 6/12/23, 95-

98. Following a meeting at AFI at which Sandra Keeley, Eric and Paul Albee, Charles Ye and Mr.

Hong were all present, it was decided to write off the receivable as the cubes were no longer

saleable. Id. at 99-100.

28. Despite the receivable, AFI had no difficulty doing business with the Hong factory in

China and having it do the manufacturing needed to fill its orders on other jobs with Gold Canyon

International and Air Essentials. N.T. 6/12/23, 157-163; N.T. 6/13/23, 86-88; N.T. 6/20/23, 12.

29. Notwithstanding the write-off of the receivable owed to the Hong factory, both Eric Albee

and Sandra Keeley recognized that AFI nevertheless needed to secure an additional source of

capital or financing for the company. N.T. 6/12/23, 99-100; N.T. 6/14/23, 60-61. Although Sandra

Keeley suggested they pursue the same or similar arrangement as they had used to first obtain

capital to move forward on the Scentbug project, Eric Albee rejected her suggestion outright and

refused to discuss it, because “they won’t accept that.” N.T. 6/12/23, 100-101. At no time did

Eric Albee pursue or seek out financing on behalf of AFI for the HomeWorx project. Id.; N.T.

6/13/23, 170-171.

30. Instead, in or around March 2017, Eric Albee unilaterally decided to “transfer” the

HomeWorx project from AFI to White Bear Trading Company, because he believed “it was the

best way to save a project to keep it moving forward.” N.T. 6/13/23, 152, 160; N.T. 6/14/23, 62.

Prior to transferring the project, Eric Albee never informed or discussed his decision with Sandra,

Paul, or anyone else at AFI. N.T. 6/13/23, 100, 105, 109, 152-154, 171-172; N.T. 6/14/23, 62-63,

192-194.

31. Eric Albee represented to Homeworx that there existed a “shared technology agreement”

between White Bear and AFI. N.T. 6/13/23, 152-154; Ex. 11. This “shared technology

agreement” apparently arose in response to a request from HomeWorx, was never written, and

Eric Albee never discussed it with either Sandra Keeley, Paul Albee, or anyone else at AFI prior

to or after he entered it on behalf of both AFI and White Bear. Id.; N.T. 6/12/23, 108-109, 208-

209; 6/13/23, 79-80, 161-163; 6/14/23, 195; Ex. 16.

32. On March 17, 2017, Eric Albee sent an email using his personal Gmail account to Yvonne

Franco at HomeWorx responding to her request for “a note regarding the transfer of the HS

HomeWorx orders from Aromatic Fusion to White Bear Trading Co., LLC.” Ex. 11. In the email,

Eric explained that while he initially intended to do the work on this project at Aromatic Fusion,

his “production facility in Pennsylvania,”

[d]ue to the tight time requirements of this program, there was a need to change

production to China based manufacturing which involves a different level of

logistics, coordination, financial management, funding and manpower. This work

is managed by White Bear Trading Co., LLC with our team in Boca Raton, FL for

legal, finance, management and main office, along with our team in Hong Kong for

product development, engineering, manufacturing management and logistics

coordination with partner factories in China. Since this transfer, Jimmy has had the

chance to visit the factory in China, as well as work directly with Charles from our

team in Hong Kong, in order to accelerate the project. The additional resources

available with White Bear Trading Co., LLC were needed to accomplish this

program both with manpower and financially as there was a significant investment

needed of both to finish development of the products, create gel melt tooling,

prototype building, engineering and sample production labor, etc. …

As these are two separate companies, I have structured a shared technology

arrangement between the two companies and I will coordinate this internally

through our normal internal channels. At this point any contact regarding

placement of purchase orders, as well as any contact regarding these projects should

go exclusively through White Bear Trading Co., LLC for management, and we will

coordinate details internally through the partner companies involved. . . .

Id.; N.T. 6/13/23, 152-154.

33. After March 2017, AFI received no more work from HomeWorx. As per Eric Albee’s

instructions, HomeWorx removed AFI and substituted White Bear Trading Co. as a vendor on its

paperwork, and all purchase orders and all payments were thereafter sent to White Bear instead of

AFI. N.T. 6/12/23, 203-205; 6/13/23, 86, 173-183; N.T. 6/14/23, 187-189; Exs. 12, 14.

34. Although he acknowledged the “shared technology agreement” was never reduced to

writing, Eric Albee testified it provided for the payment of a flat fee by White Bear to AFI, initially

in the amount of $30,000. N.T. 6/13/23, 154, 161-162. However, because the project got larger,

the fee was subsequently increased to $50,000. Id. Purportedly, the fee was compensation for use

of AFI’s technology and its preparation of product samples. Id. at 163. The fee was not required

to be paid by a date certain nor did the agreement permit AFI to perform an accounting of the sales

that resulted from the use of its technology and samples to determine how the amount of the fee

was calculated. Id. AFI has never had a shared technology or licensing agreement with any other

company pursuant to which it would be paid royalties. N.T. 6/12/23, 206; N.T. 6/13/23, 79-80;

N.T. 6/14/23, 195-196.

35. On March 21, 2017, Paul Albee underwent heart bypass surgery and was unable to work

for several months afterward. N.T. 6/12/23, 46-47, 130-131; 6/13/23, 183-184, 6/14/23, 167-168,

189-190. While Paul was out, Eric Albee decided to investigate what was causing AFI’s financial

difficulty. N.T. 6/14/23, 30-31. In doing so, Eric found bank statements reflecting payments to

the mortgage company holding Sandra Keeley’s mortgage and to her personal Best Buy credit

card, as well as various direct funds transfers to her personal bank accounts, totaling approximately

$683,000. Id. at 32. When Paul Albee returned to part-time work in mid-June 2017, Eric discussed

his findings with him. The day after Paul’s return, he and Eric confronted Sandra and asked for

her resignation. Id., 32-33, 169-176; N.T. 6/12/23, 46-48.

36. On June 19, 2017, Sandra Keeley resigned her position(s) with AFI. Pursuant to a

corporate resolution entered June 20, 2017, Sandra transferred her remaining interest in AFI to

Paul Albee and Eric Albee in equal parts and agreed she would “no longer be involved in any of

AFI’s operations, financial or otherwise, or other related businesses of dba’s.” N.T. 6/12/23, 64-

69, 130; Exs. 33, 34, 35. Eric Albee thus became the owner of 54% of the shares of AFI and Paul

Albee the owner of 46%. N.T. 6/13/23, 126-127.

37. Although Sandra Keeley did not defend herself from Eric Albee’s accusations during the

June 2017 meeting, she was happy to resign because she felt she was working too much as the

result of Eric’s move to Florida, and no longer wanted to be in business with him. N.T. 6/12/23,

46-50; N.T. 6/14/23, 174. Following her resignation, Sandra continued to work for AFI until Diane

Aiello, the new office manager/bookkeeper, who was hired in late June 2017 could be trained and

the company’s books and records moved from the Peachtree accounting system to QuickBooks.

N.T. 6/13/23, 60-63, 67-68; N.T. 6/14/23, 176. During this time, Sandra produced and reviewed

financial spreadsheets from 2015 – 2017 with Paul which showed that while she did wrongfully

pay for some personal expenses using company funds, most of the checks made payable to her,

and to her mother, Mary Ann Albee, were repayment for bridge loans they made to the company

until funds came in from receivables, and for cash to pay the employees. N.T. 6/12/23, 48-49;

N.T. 6/14/23, 176-178. When Sandra and Paul tried to present the supporting documentation to

Eric, he refused to look at or discuss it, and continues to believe Sandra Keeley stole nearly

$700,000 from AFI. N.T. 6/12/23, 48-49; N.T. 6/13/23, 204; N.T. 6/14/23, 177-179; Ex. 7.

38. Between 2017 and 2019, with AFI’s sales and revenues continuing to fall due to the

ongoing reduction in Scentbug sales and a tighter, declining marketplace, AFI was forced to use

its credit line more frequently to meet payroll and pay operating expenses. N.T. 6/14/23, 30-31.

39. On October 18, 2017, AFI received a $50,000 wire transfer to its TD bank account from

“Willits & Associates, P.A. Florida IOTA Trust Account.” Under the heading “Payment Details,”

the fax transmittal cover sheet and letter notification from TD Bank stated only “Royalty Payment

for Gellebos.” N.T. 6/13/23, 76-78; Ex. 16. Because Eric Albee had not told anyone at AFI about

the shared technology agreement, no one at AFI knew what the wire transfer was for or why it was

sent. N.T. 6/12/23, 205-206; N.T. 6/13/23, 50. When AFI’s production manager AJ Campione

and Diane Aiello asked Eric what the $50,000 transfer was for, he refused to explain and just said

it had to do with sales related to HomeWorx. N.T. 6/12/23, 207-209, N.T. 6/13/23, 50-52, 76-79.

40. As AFI’s office manager, Diane Aiello is responsible for overseeing the accounts

payable, accounts receivable, customer service, purchasing and shipping. N.T. 6/13/23, 61. As

part of these functions, it is Aiello’s responsibility to generate or prepare invoices to customers, as

well as make sure invoices from vendors are paid. Id. 63-65. She uses the QuickBooks program

to do and track everything. Id. In addition to Aiello, Eric Albee is the only other person at AFI

who uses the QuickBooks login credentials. Id. at 68.

41. On October 18, 2017, Eric Albee created an invoice on behalf of AFI directed to White

Bear Trading Company seeking payment of $50,000 which he emailed to Ryan Willits. Id., 50-

53, 83-84, 189-191; Ex. 15. Notwithstanding that Diane Aiello was AFI’s office manager, Eric

Albee did not copy her on the email, provide her with a copy of the invoice or discuss it with her.

Id. As a result, she never made an entry into AFI’s books to show White Bear owed $50,000. Id.

at 84-85.

42. AFI makes interest-only monthly payments in the range of $1,400 to $1,600 on the

$250,000 working capital loan to Univest through automatic withdrawal. N.T. 6/13/23, 85. That

loan remains collateralized by Paul and Mary Ann Albee’s home. Id. at 85-86. Despite the

working loan, which is for the most part maxed-out, additional bills for things like raw materials

which AFI lacks the finances to pay often arise. Id. at 73-74; N.T. 6/12/23, 141. When this occurs,

Paul and Mary Ann Albee or P3N, Paul’s consulting company, have infused the necessary funds

to AFI to pay these bills, by depositing monies into AFI’s account or charging the outstanding bills

to their own credit cards. N.T. 6/13/23, 65-66, 73-74; N.T. 6/14/23, 197-198. Diane Aiello keeps

track of these infusions, which are deemed loans, on both a separate Excel spreadsheet and in the

QuickBooks general ledger. Id.; Exs. 61, 68, 69.

43. Diane Aiello has regularly informed Eric Albee that his parents are putting money

into the company and he has never objected to them doing so. Id. at 69. Currently, the total amount

owed by AFI to Paul and/or Mary Ann Albee and/or P3N is $439,806. Id. at 70-73. Because Eric

Albee is rarely in AFI’s office, Aiello does not turn to him for help in paying AFI’s expenses. Id.

at 74.

44. In the fall of 2019, Eric Albee needed money and sought to access the funds in his

401k with AFI. Because the only way he could access those monies was by resigning his

employment with AFI and cashing out his 401k, Eric resigned as a paid employee but retained his

54% shareholder interest in AFI. After cashing out his 401k, Eric did infuse $10,000 into AFI for

payment of bills. Since then, Eric has not loaned or contributed any money to AFI. N.T. 6/13/23,

90-93, 197-198.

45. While working at AFI, both Paul and Eric Albee have long done consulting work,

formed other business entities, and engaged in other business ventures. N.T. 6/12/23, 118-119,

209-213, N.T. 6/13/23, 95-96; N.T. 6/14/23, 84, 150-151. There is no written agreement between

the AFI shareholders concerning the circumstances under which they can provide consulting

services or use technology developed at the company. Rather, there exists only the written

corporate resolution made when Sandra Keeley resigned in June 2016 in which she alone agreed

“that all technology, intellectual property, patents or other funded (sic) by Aromatic Fusion will

remain the sole property of Aromatic Fusion, whether listed in the name of the corporation or in

the name of individuals.” N.T. 6/14/23, 110-115; N.T. 6/20/23, 18-19. Ex. 34. Notwithstanding

the actual language of the resolution and its failure to specify what technology, property or patents

are covered, Eric Albee believes this resolution applied to him and his father as well as his sister.

Id. at 115-116. Paul Albee does not share this belief; rather it was his understanding and intent

that this related solely to Sandra’s departure from the company and her sole agreement to release

any and all of her interests in AFI’s technology and property. N.T. 6/20/23, 18-19.

46. In addition to White Bear Trading Co., Eric Albee has another business, Aroma43,

through which he sells candles and scented/fragrance reeds at craft fairs and local stores. 6/12/23,

131, 210-212; N.T. 6/13/23, 95-96; N.T. 6/14/23, 37. Fragrance reeds are long, colored,

fragranced “lollipop” sticks which are used in a diffuser or simply placed in a vase to fragrance

ambient air. 6/12/23, 109-110. AFI also sold fragrance reeds as part of its product line, primarily

to Air Essentials. Id.; Ex. 26.

47. Aroma43 bought many of the materials it needed for the scented reeds from AFI.

Eric Albee asked AJ Campione, AFI’s production manager, to make packs of the reeds for

Aroma43 in batches of 2,000 to 5,000. N.T. 6/14/23, 37-38. Although Aroma43 was originally

Eric Albee’s sole proprietorship, with the formation/incorporation of White Bear Trading

Company, Aroma43 became a brand owned by White Bear to which all proceeds from Aroma43’s

sales and/or revenues are now directed. N.T. 6/13/23, 224; 6/14/23, 37. Despite Air Essentials

having long been an AFI customer, White Bear also now sells scented reeds to Air Essentials. Id.

223-228; Ex. 26. Between 2018 and 2020, White Bear received $11,867 in revenue from Air

Essentials. Ex. 28.

48. In 2017, Eric Albee also provided consulting services to PLZ Aeroscience for which

he received $75,000 in compensation. N.T. 6/14/23, 115-117; Ex. 17. Eric did not turn any of

these consulting fees over to AFI. Id. at 117.

49. In 2007, while still working at ROWA, Inc., a plastics manufacturing company, Paul

Albee began working with Eric and Sandra on a few different projects. N.T. 6/12/23, 122-123.

Shortly after he retired from his job with ROWA, Paul joined AFI, initially with the intention of

helping Sandra and Eric with simple tasks such as installing shelving and painting; he did not have

and did not want any management or other responsibilities. N.T. 6/14/23, 151-153. In the

beginning, Paul would go to AFI a few times a week but this gradually changed, and eventually

he was working every day. N.T. 6/12/23, 126-127; N.T. 6/14/23, 152. Presently, Paul Albee

continues to be involved full-time with AFI and now manages much of the company’s activity,

together with Diane Aiello. N.T. 6/14/23, 152-154. Despite his full-time work schedule, Paul has

never received any monetary compensation for working at AFI. Id.; N.T. 6/12/23, 118, 126;

6/13/23, 94-95; N.T. 6/14/23, 154.

50. Paul Albee had long done consulting work for the plastics industry, and he continued

consulting after joining AFI. N.T. 6/12/23, 117-118, 209-210; N.T. 6/13/23, 95. Paul would

nearly always follow up a meeting or consulting appointment by preparing a “call report,”

outlining the meeting and what potential business might result from it. N.T. 6/12/23, 119, 211-

212. The call reports were kept in a file stored behind Diane Aiello’s desk and were accessible to

everyone. N.T. 6/12/23, 212. Eric Albee did not prepare call reports but he would write notes.

Id. Paul Albee’s consulting activities often generated business for AFI, and his, Eric’s and A.J.

Campione’s consulting activities were well known and discussed by everyone involved in the

business of AFI. N.T. 6/12/23, 117-118, 209-215; N.T. 6/13/23, 95-96; N.T. 6/14/23, 117. Eric’s

separate projects did not result in work for AFI. N.T. 6/13/23, 53-54, 95-96.

51. Paul Albee formed P3N to apply for grants from the United States Forest Service and

is the consulting firm through which he now does much of his consulting work. N.T. 6/14/23,

150-151; N.T. 6/20/23, 27-28, 32-33. During COVID, P3N was able to qualify for certain loans

which AFI by itself or doing business as Addisperse could not. N.T. 6/14/23, 199. P3N took out

a $25,000 loan which it then loaned/used to pay AFI’s rent and other expenses. Id.; Ex. 60.

52. Both Paul and Eric Albee at various times enlisted A.J. Campione to help with their

consulting projects using AFI’s facility and/or resources. N.T. 6/12/23, 214-216; N.T. 6/13/23,

18-25, 36, 54. Campione was not taken away from the work he was doing for AFI to work on Paul

Albee’s consulting projects and he was never paid by P3N. N.T. 6/12/23, 215-216. Campione

was never paid for his work on Eric Albee’s projects either. N.T. 6/13/12, 54.

53. Paul Albee has at various times either brought laboratory equipment which he

already owned to AFI, or bought new equipment for use at AFI using his own money. N.T.

6/20/23, 14. Included were a small, one-inch, single screw extruder, a microscope given to him

when he was working at Lynn Plastics, and several small kettles he obtained while working at

ROWA. Id. at 15-17; N.T. 6/12/23, 125-126; Ex. 85. Eric Albee was aware these items had been

brought to AFI by his father and did not object. N.T. 6/20/23, 15. In bringing his equipment to

AFI, Paul Albee did not intend it to then become the sole property of AFI, nor did he and Eric ever

discuss the matter of the equipment’s ownership. Id.

54. Simultaneous to his work with AFI, Paul Albee has also done consulting work for

numerous businesses, individuals, and government agencies, including the Forestry Service,

Chevron Phillips Chemical Company, American Process/AVAPCO/GranBio, and Kim Nelson, its

chief technical officer, Milliken & Company, BOCO, Aaron Guan, Trigon Plastics, Celluforce,

Roberto Galvez, SP Films, and Vandir. N.T.6/20/23, 24-55; Exs. 19, 150-153, 155, 156-162, 170-

172, 174, 176, 182, 184, 186, 188-196, 198, 207, 221-235. Paul Albee’s consulting work was

focused in the field of chemistry, plastics additives, and polymers, in which he worked for over

fifty years. N.T. 6/14/23, 144-150; N.T. 6/20/23, 24-55. In his consulting work, Paul Albee did

not disclose any of AFI’s trade secrets or proprietary information to any of the entities with which

he consulted. N.T. 6/20/23, 35-42; Ex. 21.

55. Several patents have been issued to one or more of AFI’s principals since 2010. N.T.

6/20/23, 20-21. In or around 2014, a patent was issued to Eric Albee and Sandra Keeley for a

manufacturing process for a foaming or blowing agent concentrate that controls the amount of

moisture generated from the decomposition of blowing agent components. Id. at 21-23. A patent

was also issued to Paul Albee, Eric Albee and Sandra Keeley for a cube design, and another patent

was granted to all three AFI principals for a biodegradable biopolymer fragrance delivery system.

Still another patent was issued to Paul Albee alone in October 2022 related to the ability to disperse

nanoparticles from a water phase to a solid phase. Id. at 19-24. Apart from Sandra Keeley’s

assignment of her interest in the above patents to AFI, the patents remain the property of the

individuals to whom they were issued, i.e., Paul and Eric Albee, not AFI. Id.

56. In 2020, while setting up his father’s AFI email on his AFI computer, Eric Albee saw

emails from Aaron Guan of BOCO, Kim Nelson at American Process and from AVAPCO and

GranBio, Trigon, SP Films and Chevron Phillips. N.T. 6/14/23, 38-44. Eric Albee saw that Paul

Albee had earned “substantial monies” from these companies from his consulting activities which

Eric believed should have been turned over to AFI. Id. at 44-45.

57. Paul Albee’s consulting work for Chevron Phillips began in 2019 and involved the

development of a process for taking nano-sized material in water, replacing it with a polymer to

keep the particles separated and then dispersing it into a plastic and/or converting it into a solid

material. From that, AFI/ d/b/a Addisperse could make a master batch or compound to be supplied

to Chevron and other companies for film production. N.T. 6/20/23, 24-27; Ex. 198. It was at or

around this same time that Paul Albee was trying to get a U.S. Forest Service grant to assist with

developing this technology for use in converting small, discarded, wood fibers into nanoparticles

for conversion into useful products. N.T. 6/20/23, 27-28, 32-33. If the technology could be

developed, Paul believed it presented an opportunity for Addisperse to create a unique product

and/or it would have given Addisperse “a leg up on the industry.” Id.; Ex. 188.

58. On November 23, 2020, Eric Albee sent a letter to the Senior Vice President for

Legal and Public Affairs/General Counsel and Secretary of Chevron Phillips on AFI/Addisperse

letterhead. In the letter, Eric alleged he recently learned that representatives of Chevron Phillips

had been working with “individuals” from AFI, d/b/a Addisperse to “inappropriately use trade

secrets from AFI. These AFI trade secrets are in the area of crystalline cellulose filler, nano

cellulose crystals, chitin whiskers and other nano materials, along with the pre-treatment, treatment

and compounding of these into additive blends, pre-concentrates, additive concentrates, plastic

compounds, finished film and other products.” N.T. 6/14/23, 79-81; Ex. 20. The letter further

claimed that “Chevron Phillips Chemical entered into an agreement with Paul Albee and P3N

Technology with “full understanding that the trade secrets involved in this work were developed

at and the property of AFI, not the property of Paul Albee personally or property of P3N

Technology, Inc.” Id. Eric Albee concluded the letter with the following proposal:

As Chevron Phillips Chemical seems to have a deep interest in this technology, I

would be open to discussing the sale of my controlling interest in AFI to Chevron

Phillips Chemical. I have asked that actions on civil and criminal fronts be briefly

paused while I explore a more gentlemanly approach of offering to sell my

controlling interest in AFI to the companies most aggressively interested in this

AFI technology, Chevron Phillips Chemical being significant among them. The

ownership, protection, and incredible future potential of these AFI trade secrets can

then pass along to the company that chooses to acquire my interest in AFI.

Id.

59. Paul Albee did not hide his consulting work with Chevron Phillips or his attempt to secure

grant monies from the U.S. Forest Service to help fund the development of his nano and crystalline

cellulose filler technologies. N.T. 6/13/23, 38-42; N.T. 6/20/23, 29; Exs. 92, 94. To the contrary,

Paul memorialized most of his interactions with Chevron Phillips into the call reports stored next

to Diane Aiello’s desk and which are accessible to everyone. N.T. 6/20/23, 29.

60. Eric Albee did not share a copy of the letter which he sent to Chevron Phillips or discuss

it or any of its contents with Paul Albee before sending it. N.T. 6/20/23, 29-30. As a result of this

letter, Chevron Phillips terminated all contacts and relationships with AFI, Paul Albee and/or P3N.

Id. at 31-32. AFI therefore received no business from or with Chevron Phillips and did not get the

grant from the Forest Service. Id.; N.T. 6/13/23, 42-43. Chevron Phillips declined Eric Albee’s

offer to sell his interest in AFI to it. Ex. 21.

61. Although as a consultant, Paul Albee was usually paid for his time and expenses, he did

not receive any compensation or revenue from his work with BOCO and Aaron Guan nor did his

work result in any business for AFI/Addisperse. N.T. 6/20/23, 39-43; Ex. 165. His consulting

work did result in generation of some business for AFI with Trigon, CelluForce, and Roberto

Galvez/Vandir/SP Films. Id. at 45-52.

62. White Bear Trading Company’s General Ledger report for 2017 reflects that it had

income from sales of HomeWorx products totaling $1,019,551 and that it paid a total of

$738,718.42 for supplies and materials (costs of goods sold) to Wealthy Lane International. N.T.

6/14/23, 6, Ex. 17. As reflected on its Federal Income Tax return for 2017, whether from

HomeWorx or other sources, White Bear reported total gross receipts or sales of $1,518,408 for

the year, and stated its costs of goods sold were $806,227. This resulted in a gross profit to White

Bear of $712,181 for 2017. N.T. 6/14/23, 74-75; Ex. 18. These figures are in keeping with what

Paul Albee expected AFI to realize from the HomeWorx project had it not been transferred to

White Bear. N.T. 6/14/23, 187-189.

PROCEDURAL HISTORY

Paul Albee commenced this action on September 7, 2021 individually and derivatively on

behalf of AFI against Eric Albee, White Bear Trading Company and AFI, as a nominal defendant,

alleging breach of fiduciary duty, shareholder oppression, tortious interference with contractual

relations, and unjust enrichment. ECF No. 1. In his Amended Answer to the Complaint, Eric

Albee on his own behalf and on behalf of AFI and White Bear Trading Company, counterclaimed

against Paul Albee for embezzlement/fraudulent conversion of company funds belonging to AFI,

tortiously interfering with existing and prospective contractual relationships, violations of the

federal Defense of Trade Secrets Act, and the Pennsylvania Uniform Trade Secrets Act, and breach

of fiduciary duty/duty of loyalty. Def.’s Am. Ans. to Compl., 18-28, ECF No. 35. The

counterclaim also sought the corporate dissolution of AFI. Id. at 29. In the Second Amended

Third-Party Complaint of Eric Albee and Aromatic Fusion attached to the Amended Answer, these

same causes of action were asserted against P3N Technology, Inc., Sandra Albee-Keeley and Mary

Ann Albee, along with a claim that Sandra Albee-Keeley and Mary Ann Albee engaged in aiding

and abetting Paul Albee’s breach of fiduciary duty and duty of loyalty. Id. at 32-45.

The matter was heard non-jury before the undersigned over a five-day period commencing on

June 12, 2023 and continuing on June 13, 14, 20 and 21, 2023. Shortly after the trial concluded,

Eric Albee was ordered to file a brief in support of his argument to dismiss all of Paul Albee’s

claims on the grounds they were barred by Pennsylvania’s two-year statute of limitations. Order,

June 21, 2023, ECF No. 57. Following briefing, the Court determined the law of New Jersey, as

the state in which AFI was incorporated, was applicable to the claims raised in this case and denied

the motion to dismiss on June 29, 2023. Order, June 29, 2023, ECF No. 63.

DISCUSSION

Claims Raised in Paul Albee’s Complaint

The Court first addresses Paul Albee’s claims against Eric Albee and White Bear Trading

Company on behalf of himself and derivatively on behalf of AFI. These claims (for shareholder

oppression, breach of fiduciary duty, tortious interference with contractual relations, and unjust

enrichment) arose out of Eric Albee and Aroma 43/White Bear’s actions regarding AFI’s work on

the HomeWorx project and with Chevron Phillips.

Shareholders’ actions under New Jersey law are governed by the relevant provisions of the

Corporations Act, N.J.S.A. 14A: 3-6, et. seq. A pre-condition to commencement of a derivative

proceeding is the submission of a written demand upon the corporation to take a suitable action,

to be followed by a period of ninety days within which the corporation must act. N.J.S.A. 14A: 3-

6.3. Once expired, a derivative action may be filed. Id. As alleged in Paul Albee’s Complaint

and admitted in Eric Albee’s Second Amended Answer, such a demand letter was sent on March

18, 2021. Compl., ¶ 44, ECF No. 1; Am. Ans., ¶ 44, ECF No. 35. As there was no amicable

resolution as demanded and the Complaint was not filed until September 7, 2021, the case is

properly treated as a derivative action.

In Count I of his Complaint, Paul Albee makes a claim in his individual capacity against Eric

Albee pursuant to the New Jersey Oppressed Shareholder Statute, N.J.S.A. § 14A:12-7. Under §

14A:12-7(1)(c), which applies to corporations with 25 or fewer shareholders, the Court is

empowered to appoint a custodian or provisional director, order a sale of the corporation’s stock,

or enter a judgment dissolving the corporation if “the directors or those in control have acted

fraudulently or illegally, mismanaged the corporation, or abused their authority as officers or

directors or have acted oppressively or unfairly toward one or more minority shareholders in their

capacities as shareholders, directors, officers, or employees.” A “minority shareholder” is one

who does not have control of the corporate shares with respect to voting rights, regardless of the

percentage of their ownership interest. Berger v. Berger, 592 A.2d 321, 327-328 (N.J. Super. Ct.

Ch. Div. 1991).

Ordinarily, “oppression by shareholders” is shown “when they have awarded themselves

excessive compensation, furnished inadequate dividends, or misapplied and wasted corporate

funds.” Muellenberg v. Bikon Corp.. 669 A.2d 1382, 1388 (N.J. 1996). Additionally,

“oppression” has been defined as “frustrating a shareholder’s reasonable expectations.” Brenner

v. Berkowitz, 634 A.2d 1019, 1028 (N.J. 1993). Because N.J.S.A. 14:12-7(1)(c) “is written in the

disjunctive,” a finding of either fraud or illegality, without a finding of oppression, may be

sufficient to permit a court to conclude the statute has been violated. Id. at 1032. “However, in

addition to demonstrating fraudulent or illegal conduct, mismanagement, or abuse of authority, or

oppressive or unfair conduct, a plaintiff must also demonstrate a nexus between that misconduct

and the minority shareholder or [his] interest in the corporation.” Id. at 1028. The courts should

consider the seriousness of the violation, whether the misconduct thwarts the minority

shareholder’s reasonable expectations of his or her role in the corporation, and what remedy is

appropriate to redress the harm. Brenner, 634 A.2d at 1029-30. Importantly, even when the statute

is triggered, the trial court has discretion to choose the appropriate remedies, and is not limited to

the statutory remedies; a wide array of equitable remedies are available. Id. at 1033.

The Court finds it was reasonable for Paul Albee to expect Eric Albee to act in the best

interests of AFI. Indeed, there was no reason why Paul wouldn’t have expected Eric to continue

to expend the same efforts into generating new products and business for AFI that he had expended

when he first started the business and before he relocated to Florida given Eric’s assurances that

he would do just that. But the trial record reflects otherwise. Rather, beginning in 2014 after he

divorced and moved to Florida, Eric participated less and less in AFI’s operations, focusing instead

on his own separate ventures, such as Aroma43 and White Bear. Despite promising his father that

he would work for AFI while living in Florida just as he had while living in New Jersey and would

split his time between the two states, over the ensuing years, Eric Albee’s trips to Pennsylvania

became less and less frequent. On those occasions when he was working in the Bensalem office,

Eric largely stayed behind his closed office door and engaged very little with other company

members or employees. He no longer secured any of AFI’s credit lines and, apart from loaning

$10,000 after cash-out of his AFI 401k, Eric Albee did not loan or provide any other financial

support or backing to the company. Nor did Eric make any efforts to secure alternative financing

for AFI, such as he and Sandra Keeley had obtained to finance development and production of the

Scentbug. To the contrary, Eric refused to even discuss exploring new ways to obtain new capital

to assist in paying the Chinese manufacturer for the HomeWorx project.

Paul Albee also had a reasonable expectation that since AFI had completed nearly all the

work for the HomeWorx project, it would receive the orders, would oversee manufacturing of the

products, and would receive the profits from the sales. However, unbeknownst to Paul, Eric had

incorporated White Bear Trading Company in Florida with a partner, Ryan Willits, and unilaterally

“transferred” the HomeWorx work to White Bear. Claiming there was an unwritten “technology

sharing agreement” between AFI and White Bear pursuant to which White Bear paid AFI a flat

fee of $50,000 for use of its technology and development of product samples, Eric thus re-directed

all HomeWorx orders and profits to White Bear. In so doing, Eric Albee acted fraudulently and/or

illegally, abused his authority as AFI’s majority shareholder and/or president, and mismanaged

AFI to benefit himself and White Bear Trading Company, thus frustrating Paul Albee’s reasonable

expectations and harming him and AFI. Eric Albee’s conduct constitutes shareholder oppression

under New Jersey’s statute entitling Paul Albee to relief on Count I of his Complaint.

In Counts II and III of the Complaint, Paul Albee claims Eric Albee breached the fiduciary

duties which he owed both to Paul himself as the minority shareholder and to AFI. To establish a

cause of action for breach of fiduciary duty under New Jersey law, “a plaintiff must show that: (1)

the defendant had a duty to the plaintiff; (2) the duty was breached; (3) injury to the plaintiff

occurred as a result of the breach; and (4) the defendant caused that injury.” Namerow v.

PediatriCare Associates, LLC, 218 A.3d 839, 846 (N.J. Ch. Div. 2018). The essence of a fiduciary

relationship is that one party places trust and confidence in another who is in a dominant or superior

position. F.G. v. MacDonell, 696 A.2d 697, 703-704 (N.J. 1997). The fiduciary’s obligations to

the dependent party include a duty of loyalty and a duty to exercise reasonable skill and care. Id.

at 704.

Stockholders of closely held corporations have a duty of “utmost good faith and loyalty”

to the corporation as well as to each other. Muellenberg, 669 A.2d at 1386. Majority shareholders

and directors have a fiduciary duty to treat minority shareholders fairly and with the “utmost

fidelity,” and to refrain from “using their powers for their own personal advantage to the detriment

of the minority shareholders.” Casey v. Brennan, 780 A.2d 553, 568 (N.J. App. Div. 2001), aff’d,

801 A.2d 245 (N.J. 2002). “[C]orporate officers and directors who engage in self-dealing

transactions have a heavy burden of showing that they have not violated their fiduciary obligations

to the minority stockholders.” Berkowitz v. Power/Mate Corp., 342 A.2d 566, 574 (N.J. Ch. Div.

1975). “At a minimum, their conduct is subject to a searching inquiry to determine whether it

conforms to accepted concepts of fairness and equity.” Id.

The Court finds Eric Albee breached the fiduciary duties which he owed to both Paul Albee

and AFI in several ways. First, he diverted AFI’s business opportunity with HomeWorx to White

Bear. “The corporate opportunity concept is one aspect of a general rule that a fiduciary’s loyalties

may not be divided.” Valle v. N. Jersey Auto. Club, 359 A.2d 504, 507 (N.J. App. Div. 1974),

aff’d, 376 A.2d 1192 (N.J. 1977). To prove the diversion of a corporate opportunity, a plaintiff

must show that:

(1) a corporate officer or director is presented with a business opportunity; (2) “the

corporation is financially able to undertake” the opportunity; (3) the opportunity,

by its nature, is “in the line of the corporation’s business and is of practical

advantage to it[]”; (4) “the corporation has an interest or reasonable expectancy[]”

in the opportunity; and (5) “by embracing the opportunity, the self-interest of the

officer or director will be brought into conflict with” the interests of the corporation.

Alper v. Simon, No. A-2016-11T4, 2014 WL 2864988, at *21 (N.J. App. Div. June 25,

2014) (quoting Valle, 359 A.2d at 507). If these elements are met, “the law will not permit

[the corporate officer or director] to seize the opportunity for himself.” Valle, 359 A.2d at

507 (quoting Guth v. Loft, 23 Del. Ch. 255, 5 A.2d 503 (Sup. Ct. 1939)). “And if, in such

circumstances the interests of the corporation are betrayed, the corporation may elect to

claim all of the benefits of the transaction for itself, and the law will impress a trust in favor

of the corporation upon the property, interests, and profits so acquired.” Id.1

The trial record evinces that all the corporate opportunity doctrine elements are met

here. Harry Slatkin/Slatkin & Co. presented the HomeWorx opportunity to Eric Albee in

1 As noted by the Appellate Division in Valle, “New Jersey subscribes to this view of

corporate opportunity.” Id. (citing Solimine v. Hollander, 128 N.J. Eq. 228, 246 (Ch. 1940).

his capacity as AFI’s president and/or majority shareholder in 2016. AFI then began

working with fragrances and gel material and doing design work on a little gel disc to be

used in warmers and a battery-operated pillar candle with fan, and presented several

product ideas and concepts to Slatkin. AFI also entered into agreements with Slatkin and

following its incorporation, with HomeWorx. By early 2017, AFI had completed virtually

all the work necessary to enable the project to move forward and manufacturing to begin.

Eric Albee testified that he “transferred” the project to White Bear to “save it” because AFI

owed a debt to the Hong factory which precluded the factory from manufacturing the

HomeWorx products for AFI. However, credible evidence exists showing the debt had

been written off. Further, the Court does not find Eric Albee’s testimony credible, given

he failed to discuss or disclose to anyone at AFI: (1) the formation of White Bear, (2) the

“transfer” of the HomeWorx contract to it, or (3) the existence of the unwritten “technology

sharing agreement.” Moreover, AFI had no difficulty in having the Hong factory

manufacture its products for other customers, despite the existence of the supposed

receivable. By usurping the HomeWorx contract and seizing and “transferring” the

opportunity to White Bear, Eric Albee robbed AFI of the opportunity to earn several

hundred thousand dollars. In so doing, he harmed not only AFI, but also his father and

mother, who were continuing to infuse funds into AFI, and secure its credit line with their

New Jersey home.2

2 While breach of fiduciary duty is traditionally a derivative claim, it may also be brought

personally if “the oppressed minority shareholder can establish an injury distinct from the injury

suffered by the shareholders in general.” Weil v. Express Container Corp., 824 A.2d 174, 182

(N.J. App. Div. 2003). Inasmuch as Eric Albee is no longer securing any of AFI’s debt, the Court

finds Paul Albee has shown an injury distinct from the only other AFI shareholder.

Eric Albee also breached the fiduciary duty of loyalty which he owed to AFI by writing

to Chevron Phillips and threatening civil and criminal action unless it stopped working

with AFI. Because of that letter and the threats made therein, AFI lost out on the

opportunity to produce the nanomaterials which Paul Albee was working to develop for

Chevron and the U.S. Forest Service, and lost its opportunity for grant funding from the

Forest Service for a similar project. AFI also lost any potential it might have had to garner

future development and/or production work for both entities. Again, the Court finds Eric

Albee’s testimony that he wrote the letter to Chevron to protect AFI’s intellectual property

incredible. There was no agreement with respect to the ownership and treatment of AFI’s

confidential and intellectual property save for that signed by Sandra Keeley when she left

the company. That agreement was silent as to its application to anyone other than Sandra.

Further, Eric had long known of his father’s consulting work and that it often generated

work for AFI on the “additive side” of the business. Prior to his usurpation of the

HomeWorx project, Eric never objected to Paul’s consulting or development work; to the

contrary, both A.J. Campione and Eric himself had also consulted with other entities while

working for AFI. Because Eric breached the fiduciary duties which he owed to AFI, Paul

Albee is also entitled to relief on Counts II and III of the Complaint.

In Counts IV and V, Paul Albee derivatively raises claims against White Bear Trading

Company on behalf of AFI for tortiously interfering with AFI’s contract and business with

HomeWorx and for being unjustly enriched from “the significant time, costs and administrative

expenses incurred by [AFI] to research and develop the products sold to HomeWorx.” Compl. ¶

71.

New Jersey recognizes claims for both tortious interference with a contract and tortious

interference with a prospective contractual relationship. Nostrame v. Santiago, 61 A.3d 893, 900

(N.J. 2013). A cause of action for tortious interference with an existing contract arises where “one

. . . intentionally and improperly interferes with the performance of a contract (except a contract

to marry) between another and a third person by inducing or otherwise causing the third person

not to perform the contract.” Id. (quoting RESTATEMENT (SECOND) OF TORTS § 766). There are

four elements which must be shown to recover for the tort of interference with a contract: (1) a

protected interest; (2) malice (that is, a defendant who was not a party to the contract intentionally

interfered without justification or excuse); (3) a reasonable likelihood that the interference caused

the loss of the prospective gain; and (4) resulting damages. Russo v. Nagel, 817 A.2d 426, 432

(N.J. App. Div. 2003); Dimaria Const., Inc. v. Interarch, 799 A.2d 555, 560 (N.J. App. Div. 2001),

aff’d, 797 A.2d 137 (N.J. 2002).

“The doctrine of unjust enrichment rests on the equitable principle that a person shall not

be allowed to enrich himself unjustly at the expense of another.” Goldsmith v. Camden Cnty.

Surrogate’s Off., 975 A.2d 459, 462 (N.J. App. Div. 2009). Accordingly, “[a] cause of action for

unjust enrichment requires proof that ‘defendant received a benefit and that retention of that benefit

without payment would be unjust.’” County of Essex v. First Union Bank, 862 A.2d 1168, 1172

(N.J. App. Div. 2004) (quoting VRG Corp. v. GKN Realty Corp., 641 A.2d 519, 526 (N.J. 1994)).

“The unjust enrichment doctrine requires that plaintiff show that it expected remuneration from

the defendant at the time it performed or conferred a benefit on defendant and that the failure of

remuneration enriched defendant beyond its contractual rights.” VRG Corp., 641 A.2d at 526.

A constructive trust on property is an appropriate remedy to “prevent unjust enrichment

and force a restitution to the plaintiff of something that in equity and good conscience does not

belong to the defendant.” Elsayed v. Elsayed, No. A-3613-20, 2022 WL 1817045, at *28 (N.J.

App. Div. June 3, 2022) (quoting Flanigan v. Munson, 818 A.2d 1275, 1281 (N.J. 2003)). To

impose a constructive trust, a court must find one of the parties “has committed a ‘wrongful act;’”

and “second, the wrongful act must result in a transfer or diversion of property that unjustly

enriches the recipient.” Flanagan, 818 A.2d at 1281 (quoting D’Ippolito v. Castoro, 242 A. 617,

619 (N.J. 1968)).

Unjust enrichment may also constitute a ground for imposing an equitable lien. VRG

Corp., 641 A.2d at 523. “An equitable lien constitutes a special right that is a combination of a

legally cognizable debt and a binding agreement to subject property to the payment of that claim.”

Highland Lakes Country Club & Comm. Ass’n v. Franzino, 892 A.2d 646, 654 (N.J. 2006). “[F]or

an equitable lien to arise there must be a debt owing from one person to another, specific property

to which the debt attaches, and an intent, expressed or implied, that the property will serve as

security for the payment of the debt.” Id.

As is apparent from the testimony and documentary evidence produced at trial, a contractual

relationship existed between AFI and HomeWorx for the development of fragrances and fragrance

products to be sold primarily on the QVC Home Shopping Network under the HomeWorx brand.

Although it was not reduced to a formal written document, the existence of the contract between

AFI and HomeWorx is reflected in the vendor set-up forms prepared by Sandra Keeley and the

emails and non-disclosure agreements exchanged between the two entities, as well as by all the

work which AFI performed relative to the project. In “transferring” the HomeWorx project and

assuming control of the product manufacturing with Wealthy Lane and the Hong factory, Eric

Albee and Ryan Willits, acting in their capacities as principals in White Bear, intentionally

interfered and destroyed the business relationship between AFI and HomeWorx. That the actions

were intentionally calculated to do just that is clearly demonstrated in the numerous emails sent

by Eric Albee to HomeWorx’ Jimmy LeFevre and Yvonne Franco in March 2017 and by the

sudden and unexplained appearance of a $50,000 draft into AFI’s account from Ryan Willits’

attorney trust account in October of 2017. As a result of White Bear’s actions, AFI lost all the

profits it would have made from the project.

The profits lost by AFI were instead realized by White Bear. According to White Bear’s

income tax return for 2017, it reported total gross receipts or sales of $1,518,408 for the year, and

stated its costs of goods sold were $806,227. Thus, for 2017, White Bear realized a gross profit

of $712,181. While the sources of the receipts are not shown on the tax return, White Bear’s

General Ledger report for 2017 shows it recorded income from sales of HomeWorx products in

the amount of $1,019,551, and paid $738,718.42 for supplies and materials (costs of goods sold)

to Wealthy Lane International. Thus, it is reasonable to conclude that had White Bear not

interfered with AFI’s contractual relationship with HomeWorx, AFI would have realized profits

from the HomeWorx project in an amount that was somewhere between $280,833 and $712,181.

The court finds imposition of a constructive trust or an equitable lien in the amount of the profits

which White Bear reaped from the HomeWorx project in favor of AFI is an appropriate remedy.

Claims Raised in Eric Albee’s Counterclaim and Third-Party Complaint

Before judgment may be entered in favor of either Paul Albee or AFI, it is incumbent upon

the Court to consider and address the claims made by Eric Albee in his Counterclaim and Third-

Party Complaint. Turning first to the Counterclaim, in Count I, Eric and AFI assert Paul breached

his fiduciary duty and duty of loyalty. Count II alleges Paul tortiously interfered with AFI’s

existing and prospective contractual relationships. In Count III, Eric and AFI seek damages for

Paul’s alleged embezzlement and fraudulent conversion of AFI’s property. Counts IV and V raise

claims on behalf of AFI under the federal Defense of Trade Secrets Act, 18 U.S.C. § 1831, et. seq.,

(DTSA), and the Pennsylvania Uniform Trade Secrets Act, 12 PA. CONST. STAT. § 5301, et. seq.,

(PUTSA). Finally, in Count VI, Eric seeks the corporate dissolution of AFI. While all of Eric’s

claims invoke Pennsylvania law, in keeping with the Order of June 29, 2023, the Court evaluates

them pursuant to the law of New Jersey.

The gist of the breach of fiduciary duty/duty of loyalty and tortious interference claims against

Paul arise out of his alleged use of AFI’s proprietary information “regarding nano-cellulose

processes and products and entering into personal contracts to provide services to AVAPCO/Gran

Bio, Chevron and BOCO that competed with [AFI] while in direct control of, engaged with and

compensated by the company.” Second Am. Counterclaims of Eric Albee 20, ¶ 43, ECF No. 35.

It is further alleged that AVAPCO/Gran Bio, Chevron, BOCO, SP Films and Plastiques Lausa

were AFI’s customers whom Paul diverted to himself, as well as the payables due to AFI from

those customers, and that Paul’s patents on dry preparation of free flowing nano-cellulose

particulate belonged to AFI. Id. at 44, ¶ 71.

These allegations have not been proven. To the contrary, the record reflects that the

relationships between AFI and AVAPCO/Gran Bio, BOCO, SP Films, Chevron, and Plastiques,

among others, all resulted from Paul Albee’s expertise in plastics and plastics additives research

and development, and his consulting work focusing in those areas. Paul did not hide his consulting

activities: he recorded them in call reports which were stored in an open area for anyone to view

at AFI’s Bensalem location. The record evinces Paul engaged in such consulting almost from the

beginning of his affiliation with AFI, and the creation and build-up of the additive side of the

business resulted from his efforts, experience, and expertise. Paul was never compensated for his

work at AFI, other than being provided a company car, and he therefore usually kept the consulting

fees which he earned and/or deposited them into P3N. In any event, the evidence also reflects that

at least some of these funds were indeed returned to AFI, albeit in the form of loans made by Paul

and Mary Ann Albee and/or P3N to pay AFI’s ongoing operating expenses and service its debt.

The Court thus concludes Eric Albee had or should have had full knowledge of his father’s

consulting activities and the benefits which AFI was realizing as a result long before working on

Paul’s AFI email account in 2020. Eric’s testimony on these matters is disingenuous at best.

What’s more, Paul Albee was not the only AFI shareholder or employee engaging in

outside consulting. Eric Albee and A.J. Campione also did consulting at various times and neither

of them were required to disgorge the monies which they received for doing so to AFI either.

While Paul was the owner of several patents, including the one issued in October 2022 relating to

the development of preparations for dispersing nanoparticles from a water phase to a solid phase,

Eric also co-owned patents with both Paul and Sandra Keeley. Neither Eric Albee nor Paul Albee

were ever parties to any agreement(s) regarding the ownership of these patents, and, while Sandra

assigned her interest in the above patents to AFI when she resigned from the company, Paul and

Eric Albee otherwise maintain their personal ownership interests in their own patents. The only

evidence regarding the alleged misappropriation or use of AFI’s patents came from Eric’s

testimony at trial. The Court has not found that testimony to be either credible or supported by the

objective evidence. There has been no showing that Paul Albee breached his fiduciary duty and/or

duty of loyalty to AFI, or that he tortiously interfered with AFI’s existing and prospective

contractual relationships. In the absence of proof, these claims fail and judgment shall be entered

in favor of the Counterclaim Defendants and against the Counterclaim Plaintiffs on Counts I and

II.

In Count III of the Counterclaim, Eric Albee and AFI assert that Paul Albee embezzled

and/or fraudulently converted payables owed to AFI from SP Films and Plastiques Lausa.

Traditionally, embezzlement was a criminal offense under New Jersey law, requiring a

showing of the following elements: (1) a relationship between the owner of the money and the

defendant; (2) that the money alleged to have been embezzled had come into the defendant’s

possession by virtue of this relationship; and (3) the defendant intentionally appropriated or

converted that money. State v. Thyfault, 297 A.2d 873, 879 (N.J. Law Div. 1972) (citing State v.

Kennedy, 296 A.2d 65, 66 (N.J. 1972) and N.J.S.A. 2A: 102-5). Similarly, “[t]he crux of

conversion is wrongful exercise of dominion or control over property of another without

authorization and to the exclusion of the owner’s rights in that property.” Chicago Title Ins. Co.

v. Ellis, 978 A.2d 281, 288 (N.J. App. Div. 2009). “Conversion does not require that defendant

have an intent to harm the rightful owner or know that the money belongs to another.” Id. Thus,

proof that the money was obtained by fraudulent means is not required. Id. at 289.

Again, the evidence produced at trial fails to meet the burden of proof needed to sustain

these claims. Notwithstanding Eric’s testimony that his father made money from other companies

which should have gone to AFI, the record reflects that Paul Albee was being paid for his

consulting work. In the case of SP Films, Paul’s consulting did result in a small job for

Addisperse: it developed a sample anti-fog additive concentrate product for SP Films’ use in an

application in Mexico. Addisperse invoiced for the work which it performed, but Paul Albee was

not involved in collecting on invoices. Inasmuch as it was a normal course of dealing for the

parties to keep any monies earned from their outside consulting or other ventures, the Court cannot

find any unlawful embezzlement, misappropriation, or conversion of such funds by Paul Albee.

Judgment shall therefore also be entered in Paul’s favor on Count III of the Counterclaim.

Counts IV and V of the Counterclaim seek recovery of damages under the Federal Defense

of Trade Secrets Act and the Pennsylvania Uniform Trade Secrets Act. Because New Jersey, not

Pennsylvania law, is applicable to this matter, the Court shall apply the New Jersey Trade Secrets

Act, N.J.S.A. 56: 15-1, et. seq. to evaluate the state law claim.

To state a private right of action under the Federal Defense of Trade Secrets Act, 18 U.S.C.

§ 1831, et. seq., (DTSA) plaintiffs must show “(1) they own a trade secret and (2) that the defendant

misappropriated the trade secret.” Herley Indus., Inc. v. R Cubed Eng'g, LLC, 2021 WL 229322,

at *3 (E.D. Pa. Jan. 22, 2021); 18 U.S.C. §§ 1832, 1836(b)(1), (2)(ii)(IV).3 Under the New Jersey

statute, a “trade secret” is defined as information that, inter alia, “derives economic value, actual

or potential, from not being generally known to, and not being readily ascertainable by proper

means by, other persons who can obtain economic value from its disclosure or use.” Voorhees v.

Tolia, 2023 WL 4636738, at * 2 (3d Cir. July 20, 2023) (citing N.J.S.A. 56:15-2). As under the

federal statute, to prevail on a claim under the New Jersey Act, a plaintiff is also required to show

3 A “trade secret” is defined under the federal law to mean

All forms and types of financial, business, scientific, technical, economic, or

engineering information, including patterns, plans, compilations, program

devices, formulas, designs, prototypes, methods, techniques, processes,

procedures, programs, or codes, whether tangible or intangible, and whether or

how stored, compiled, or memorialized physically, electronically graphically,

photographically, or in writing if

(A) the owner thereof has taken reasonable measures to keep such

information safe; and

(B) the information derives independent economic value, actual or

potential, from not being generally known to, and not being readily

ascertainable through proper means by, another person who can obtain

economic value from the disclosure or use of the information.

18 U.S.C. § 1839(3).

that a trade secret was misappropriated and the plaintiff was damaged by the misappropriation.

Lard-Vid, LLC v. Ground Support Labs, LLC, No. BER-L5929-20 Civ. A., 2021 WL 2396576 at

*6 (N.J. Law Div. Feb. 26, 2021).

Eric Abee alleges Paul Albee “misappropriated Aromatic Fusion’s trade secrets regarding

the process of nanocellulose dispersion including sharing formula information that he knew was

developed and/or owned and protected from disclosure by Aromatic Fusion and sold those trade

secrets personally or by and through his wholly owned corporation, P3N Technology, Inc. to

AVAPCO/Gran Bio, Chevron and BOCO for his own substantial economic gain.” Am.

Counterclaims of Eric Albee, 26, 28, ¶¶ 77, 89, ECF No. 35. However, at trial, Eric produced no

evidence whatsoever to support these allegations. There was no showing that the claimed process

was in fact a trade secret belonging to AFI, no showing of what measures AFI took to protect them,

and no showing that this claimed trade secret(s) was ever compromised, disclosed, or sold to

anyone. In fact, the nanocellulose dispersion process was the subject of the patent issued to Paul

Albee alone in 2022 for which he alone performed all the research and development work, and for

which he alone paid the expenses, including attorney fees, to obtain and which has not been

assigned to AFI. N.T. 6/20/23, 19-21. The only evidence offered in support of these claims was

Eric’s own testimony that the matters on which Paul “engaged with” other companies involved

“trade secret processes that were developed at AFI earlier,” and this resulted in financial hardship

to AFI because no revenues were coming to it or being shared with it from these companies. N.T.

6/14/23, 45. At trial, Eric did not specify what these processes were, or when or how they were

purportedly disclosed during Paul’s engagements. Again, the revenues which Eric contends were

unlawfully diverted were the fees Paul was paid for consulting. Further, while Eric also reported

confronting Paul about these matters in a meeting at which A.J. Campione and Diane Aiello were

present, neither of them testified to or about any such meeting. Campione stated only that he, Eric,

and Paul all knew they had to watch what they said to others during their consulting work to ensure

none of them were giving away information in such a way that other people or entities could “run

away” with their technology, but he knew of no instance or situation in which Paul disclosed trade

secrets or technology. N.T. 6/13/23, 215-216. In the absence of any evidence to support Eric

Albee’s claims of trade secret disclosure and/or diversion, judgment shall be entered in favor of

Paul Albee on Counts IV and V of the Counterclaim.

In Count VI, Eric Albee seeks the corporate dissolution of AFI under 15 Pa. C.S.A. § 1981.

AFI, however, is a New Jersey corporation and, consequently, the invocation of a law governing

dissolution of Pennsylvania corporations is not applicable here. Corporate dissolution is “an

extreme remedy to be imposed with caution after a careful balancing of the interests at stake,”

Brenner v. Berkowitz, 634 A.2d at 1030. Indeed, “caution is needed when determining corporate

dissolution because the statutory remedy was meant only to protect the minority, not to provide a

weapon.” Id. (internal citation omitted). Neither party in this case has presented evidence

regarding any of the interests which might be at stake in the event AFI is dissolved. Therefore, in

lieu of entering judgment, the Court shall dismiss Count VI of the Second Amended Third Party

Complaint without prejudice to the rights of the parties to seek dissolution of AFI in the appropriate

forum and under the appropriate state’s law.

Finally, as for the claims for aiding and abetting the breach of fiduciary duty and duty of

loyalty of Paul Albee, tortious interference with existing and prospective contractual relationships,

fraudulent conversion/embezzlement, and misappropriation of trade secrets which Eric Albee

makes on behalf of himself and AFI in his Second Amended Third Party Complaint against P3N,

Sandra Keeley and Mary Ann Albee, the Court shall enter judgment in favor of each of the

Counterclaim Defendants on all of these counts. As noted, Paul Albee did not violate his fiduciary

duties and/or his duty of loyalty to AFI or to Eric, as AFI’s other, and majority, shareholder.

Hence, neither Sandra Keeley nor Mary Ann Albee can be liable for aiding and abetting.

Additionally, the Court credits the testimony of Paul Albee, Sandra Keeley, and Diane Aiello, and

finds the payments made to Sandra and Mary Ann of which Eric complains were reimbursements

for monies advanced and/or loaned to AFI to make payroll and/or pay operating expenses. The

sole support for the claims against these three defendants was Eric Albee’s testimony at trial. As

has been previously discussed and with the few exceptions outlined in the factual findings, the

Court has for the most part found Eric Albee’s testimony incredible and entirely uncorroborated.

The Court therefore now enters the following:

CONCLUSIONS OF LAW

1. This Court has jurisdiction over the subject matter and the parties to this action pursuant

to 28 U.S.C. §§ 1332 and 1367.

2. As the majority shareholder and President of AFI, Eric Albee had a fiduciary duty to

manage the company in a fair, honest, and equitable manner, to put the best interests of AFI and

all its shareholders above his own, personal interests, and to act in furtherance of those interests at

all times. As the majority shareholder in a closely-held corporation, Eric Albee also had the utmost

duty of loyalty to the corporation and to the minority shareholder to treat them fairly and with the

utmost fidelity, and to refrain from using his powers for his own personal advantage to the

detriment of the minority shareholders. In diverting the scented reeds sales to Air Essentials from

AFI to Aroma43/White Bear, diverting the HomeWorx contract and work from AFI to White Bear

Trading Co., and in sending correspondence to Chevron Phillips threatening legal action while

offering to sell his interest in AFI to it, Eric Albee breached his fiduciary duties and his duty of

loyalty to both Paul Albee and AFI.

3. By usurping the opportunity which had been presented to AFI from Harry Slatkin

and HomeWorx both before and following AFI’s completion of all the work necessary for the

project to move forward, and in selling the same scented reed products to Air Essentials as those

previously sold by AFI, White Bear Trading Co. tortiously interfered with the contractual

relationships between AFI and Air Essentials, and AFI and HomeWorx. White Bear Trading Co.

thereby deprived AFI of all of the profits and revenues resulting from the HomeWorx project, and

from those fragranced reeds sales which AFI could have made to Air Essentials. As a result of its

interference, White Bear Trading Co. reaped the profits and revenues which otherwise would have

gone to AFI, and has been unjustly enriched by the significant time expended by AFI in researching

and developing the HomeWorx products, as well as the considerable costs and administrative

expenses incurred by AFI during the development process.

4. There was no evidence presented at trial quantifying the expenses incurred by AFI

in its research and development of HomeWorx products and virtually no evidence as to its lost

revenues or other damages, with the exception of the amounts reflected on White Bear Trading

Company’s General Ledger report for 2017 reflecting income from sales of HomeWorx products

totaling $1,019,551 and payments totaling $738,718.42 for supplies and materials (costs of goods

sold) to Wealthy Lane International. The Court therefore finds that because of Eric Albee and

White Bear Trading Company’s tortious interference, AFI lost the revenue it would have made

from selling the products which it developed for HomeWorx, and that White Bear was unjustly

enriched at AFI’s expense in the amount of $280,833. Between 2018 and 2020, White Bear

received $11,867 in revenue from selling scented reeds to Air Essentials. Judgment in the amount

of $292,700 is properly entered in favor of AFI and against both White Bear Trading Co. and Eric

Albee jointly and severally and in favor of Paul Albee in his derivative capacity on behalf of AFI

on Counts III, IV and V of the Complaint.

5. In his capacity as President and majority shareholder in charge and in control of AFI,

Eric Albee acted fraudulently, unfairly, and oppressively toward Paul Albee as the minority

shareholder and toward AFI’s employees, abused his authority and mismanaged the operations of

the company. Judgment is properly entered in favor of Paul Albee personally and against Eric

Albee on Counts I and II for minority shareholder oppression and breach of his fiduciary duties to

Paul as minority shareholder of AFI. Pursuant to N.J.S.A. 14A:12-7(1)(c), (4) and (8), a custodian

shall be appointed to exercise all the powers of the board and officers of AFI to the extent necessary

to manage the affairs of the corporation in the best interests of its shareholders and creditors unless

a motion is made seeking the sale of all shares in the corporation to either the corporation itself or

to Paul Albee or Eric Albee.

6. Because none of the claims set forth in Eric Albee’s Second Amended Counterclaim

and Third Party Complaint have been proven, Judgment is properly entered in favor of Paul Albee,

Mary Ann Albee, Sandra Albee Keeley and P3N Technology, Inc. and against Eric Albee,

Individually and on behalf of Aromatic Fusion, Inc. in no amount.

An Order of Judgment follows.

BY THE COURT:

/s/ Juan R. Sánchez

_______________________

Juan R. Sánchez, C.J.