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Posted July 13, 2012 | comments 5 Comments

Texas accounting firm sues Shentel

By Alex Bridges -- abridges@nvdaily.com

A Texas accounting firm claims Shentel cost the company millions of dollars by misusing trade secrets and reneging on a tax-services contract.

Cablecom Tax Services Inc., of Denton, Texas, filed a complaint Friday in U.S. District Court in Harrisonburg which seeks $4.5 million in damages from Edinburg-based Shentel Telecommunications Co. and its subsidiaries. The plaintiff, represented by Oakton, Va.,-attorney Matthew A. Brennan III, has asked for a jury trial.

The three-count complaint alleges Shentel breached a contract with Cablecom and knowingly and maliciously misappropriated trade secrets. Online court records showed a summons had been issued to all defendants on Friday.

The complaint states Cablecom, doing business as Property Tax Accounting, entered into written contracts with the defendants on Aug. 25, 2010, under which the plaintiff would represent the communications company before taxing authorities in the jurisdictions where Shentel owned property. The contracts call for Shentel to pay the firm 50 percent of the combined tax savings realized by the defendants or an hourly charge of $175 for the services, whichever was less, according to the complaint.

PTA performed contracted services for Shentel and the defendant saved $1,666,136, the complaint states. The plaintiff on Sept. 26, 2011, served Shentel an itemized account of the firm's time and expenses totalling $641,426.60, according to the complaint. Cablecom claims the defendants to date have not paid the $641,426.60 owed.

"The Defendants have not provided an explanation regarding their failure to perform their obligations under the contracts and, in the knowledge of PTA, have no excuse for the failure to perform or any right of setoff," the complaint states.

But PTA claims Shentel saved much more in tax reimbursements by using the firm's trade secrets. The plaintiff disclosed trade secrets to Shentel which the accounting firm has used to reduce and obtain reimbursements of sales taxes, according to the complaint. Trade secrets were disclosed to the defendant with an expectation that Shentel would keep the knowledge secret, the complaint states.

PTA claims Shentel has used the trade secrets to obtain reductions in its sales taxes and large reimbursements of previously paid taxes, according to the complaint, but have not accounted for the savings to the plaintiff. The complaint alleges the defendants obtained reductions of at least $2 million and reimbursements of previously paid levies of more than $1 million.

"The Defendants have received benefits from the use of PTA's trade secrets and have used those secrets without the permission, either express or implied, of PTA," the complaint states.

The complaint also alleges Shentel has "been unjustly enriched by receiving the benefits of PTA's rendered services."

The plaintiff claims it is entitled to a royalty of $1.5 million because of the defendants' alleged misappropriation and use of the tax firm's trade secrets, in addition to the damages incurred from the breach of contract. The plaintiff also seeks $3 million in "exemplary" damages "to punish Defendants for Defendants' wrongful conduct and to deter Defendants from practicing such harmful and wrongful conduct on others in a similar position to that of Plaintiff."

5 Comments | Leave a comment

    I can believe Shentel has been enriched, but they sure did not enrich their subscribers. I hope something good comes from this lawsuit. STOP CORPERATE GREED!

    I would have been all for the savings if maybe just maybe, they don't come out and say they can't afford WJLA and don't carry MASN... Are you kidding me? I know, I know they provide local jobs, but why can't they do both, provide jobs and a great service?

    I really hope Cablecom is victorious, Daddy Dave and his corporate cronies at Shentel need to be taken down a few notches but I doubt it will happen as Harrisonburg is within reach of the ShenCo Good Ol Boy network. There isn't much I like about the city, but I do hope FIOS works its way out here.


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