A family business, even one that spans the globe, must have strong ties among its principals if it is to thrive. For one Nashville family, business differences have strained those human bonds to the breaking point – just in time for Christmas.

J. Wesley Green, founder of Green Hills-based language-learning products company Champs-Elysées Inc. has sued his 75-year-old mother Edna Green, his brother Mark A. Green and shareholder Arthur E. Fourier for control of the company.

Today, the family enters court-ordered mediation in an attempt to resolve the matter.

A “micro-multinational”

The profile of Champs-Elysées in the Nashville business community may not be very high, but among corporate titans, globetrotting professionals and celebrities in the U.S. and abroad, the company’s products have a substantial following.

Since 1984, Champs-Elysées has produced “audiomagazines” for intermediate to advanced students of French, German, Spanish and Italian. The audio, hosted by nationally known radio personalities from across Europe, features interviews, news, cultural highlights and popular music. A word-for-word transcript and vocabulary section, along with extensive annotation about the cultural and linguistic issues raised in the programs, comes with each month’s tape or CD.

The firm’s subscriber list is a veritable who’s who of the business and cultural elite. Customers have reportedly included actor Paul Newman and his actress wife Joanne Woodward, U.S. Supreme Court justices Ruth Bader Ginsburg and Steven Breyer, famed investment banker Henry Kravis and best-selling author John Grisham. Ivan Boesky, of insider trading notoriety, and the late Peanuts creator George Schulz also have been subscribers.

For $110 to $266.50 a year, depending on the language and options chosen, listeners are provided with audio features befitting the elite subscriber profile. They may hear director Bernardo Bertolucci musing upon the lasting significance of Last Tango in Paris, couturier Hubert de Givenchy’s reminiscences of his friendship with Audrey Hepburn, or newsmaker interviews secured by the high-powered journalists who host the shows. Past interviewees have included French president Jacques Chirac; deposed East German leader Erich Honecker; Italian Prime Minister Giulio Andreotti; actors Omar Sharif, Brigitte Bardot, and Roberto Benigni; writers Gabriel García Marquez and Mario Vargas Llosa; and athletes Boris Becker and Katerina Witt.

In past interviews, Wes Green has called Champs-Elysées a “micro-multinational.” It has subscribers in about 60 countries, offices in Nashville and Bristol, England, and production operations in several European cities. The company sells a specially produced edition in Japan and maintains websites in Dutch, Danish and Japanese.

A family venture

Wes Green, 51, a former WSM and WLAC disk jockey who learned French and German while attending boarding school in Switzerland, formed Champs-Elysées in 1983 with his widowed mother and brother. Fourier, a friend of Mark Green, became a shareholder and employee early in the company’s history.

Boosted by strong subscriber loyalty, the company prospered and grew. It added other language editions to build on the success of the flagship French audiomagazine Champs-Elysées, named for the famous promenade in Paris. It set up sales operations in the U.K. and developed spinoff products focused on the historical, musical and culinary topics covered in its programs.

The company generated in excess of $2 million in revenue in its most recent fiscal year, according to financial records filed in court. But court filings show that over the past several years, Champs-Elysées has struggled financially, even teetering on bankruptcy.

“This condition has been deteriorating for some time, and has been further weakened by global events,” Wes Green said in one court filing. He cited “the Sept. 11, 2001 terrorist attacks, the 2nd Gulf War, resulting in anti-French and anti-German sentiments in the United States, and the strength of the Euro currency against the dollar.”

Cash shortfalls have caused production problems, Wes Green wrote in a letter filed as part of the litigation. And those problems cost money. “Because our publication schedule has been so irregular, we have been unable to solicit resubscriptions since the spring,” he wrote. “The calls and e-mails are becoming more frequent, and we sense that subscribers are increasingly angry and suspicious about the company’s financial health.”

A business consultant recommended consolidating the company’s fractional ownership into the hands of one shareholder who would hold a majority interest. Raising outside capital would be easier that way, he said. With this advice, Wes Green sought control of the company in October.

Court documents show that he wrote up a one-page bill of sale in which his mother would sell him her 22,000 shares for $8,000: $2,000 up front and $1,000 per month for six months. As part of the agreement, if the company was sold within two years, Edna Green would receive half the post-tax proceeds of the sale.

Mrs. Green signed the bill of sale. But a day later, after a conversation with her son Mark in which (according to a court filing by Wes) Mark accused his mother of “stabbing him in the back,” she sought to rescind the contract.

A “particularly distasteful” action

Wes Green sued in Chancery Court last month, seeking a ruling that his mother must honor the sales contract. He filed another complaint in Circuit Court against his mother, brother and Fourier for tortious interference with a business contract. In that case, Wes Green claims his brother Mark told their mother that Fourier would pay more for her stock than the sales contract. Wes Green’s lawsuit also claims that his Mark told their mother that she had been lied to about the financial condition of the company.

At a board of directors meeting last month. Wes Green was terminated from the board and his positions of president and publisher. Fourier became president, and the company sold him 15,000 shares of stock to give him a larger share than each of the family members. According to board minutes included in court records, Wes Green was terminated for cause, the stated reason being that he didn’t call annual or special meetings for at least two years and allowed the company to deteriorate financially while advancing himself money.

Wes Green has claimed that his brother and Fourier lied about his performance. He sought a restraining order to prevent the sale of stock to Fourier. Chancellor Carol McCoy ruled against the restraining order, favoring the language of Edna Green’s attorney that called the one-page sales contract unconscionable. The lawyer had argued that the contract was one-sided, particularly since she didn’t have an attorney representing her in the negotiations.

Additionally, Mrs. Green said the retirement pay she had been receiving from Champs-Elysées had stopped two years ago when the company began to falter. A retired Metro teacher, she had worked for the company from 1983 until 1997, her retirement year. Wes Green has replied in a court filing that the money was not retirement pay but rather a shareholder distribution, and that payouts to all shareholders had been halted at the same time.

Edna Green said in her affidavit that she had repeatedly refused to sell her son the stock. But she added that she signed the contract “under an extreme amount of duress because of Wes Green’s threats to place the company in bankruptcy and because of his frantic statements that unless he acquired my stock, which would give him voting control of the company, he would not be able to obtain an ‘infusion of cash’ to save the company.”

Wes Green has hinted in one court filing at the turmoil the case must surely be generating within his family. “Plaintiff would contend that while he finds such a lawsuit particularly distasteful,” the filing said, his mother’s “refusal to honor the contract into which she freely entered left him no choice.”

James D. R. Roberts Jr. and Janet L. Layman of Roberts & Layman are representing Wes Green in the case. Eugene N. Bulso Jr. of Boult, Cummings Conners & Berry PLC represents Edna Green, and M. Taylor Harris Jr. of Gullett, Sanford, Robinson and Martin represents Art Fourier.

 

 

 

Happy Family Businesses Are All Alike
But every unhappy one is unhappy in its own way

Marc Silverman, a principal in the Providence, R.I., family business consulting firm Strategic Initiatives, says breakdowns in communication and trust are the biggest reasons family businesses fail.

Silverman commented on what he could assess about the Green case from the information revealed in the litigation. “You’ve got to begin with the issue here of a deep lack of trust,” he said, adding that communication appears to have broken down long ago. “It didn’t happen this way overnight.”

To succeed, he said, a family enterprise needs to be based on a shared vision. “That clearly has not happened in this case.” Without such a vision, “it becomes very easy for the shareholders to go to war.”

A good board helps, one that has more than one outside director, Silverman said. Having more of a balance would help with potential conflicts and provide more outside guidance and advice on running the business. “That can have an enormous effect.”

“When it goes right, the business does well and the family does well,” Silverman observed. “When it goes poorly, it really hurts the business and the family. The business gets destroyed and the family gets destroyed. I see it happen all the time.”

NashvillePost.com reporter E. Thomas Wood, who contributed information about the content of Champs-Elysées products to this report, is a former employee of Champs-Elysées and a longtime friend of the Green family.