EFiled: Jun 05 2019 05:25PM EDT

Transaction ID 63327411
Case No. 2017-0786-KSJM
IN THE COURT OF CHANCERY OF THE STATE OF DELAWAR

CHRISTOPHER J. TIGANI, Sr., CHRISTOPHER )

TIGANI, Jr., and JLT his minor child; and )
ROBERT F. TI GANI, Jr., and on behalf of GFT )
his minor child, )
Plaintiffs, )
v. )
)
ROBERT F. TIGANI, Sr., individually and ) C.A. No. 2017-0786-KSJM
as Trustee, )
Defendant, )
and )
)
NKS DISTRIBUTORS, INC., )
)
Nominal Defendant. )

VERIFIED FIRST AMENDED COMPLAINT

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Plaintiff Christopher Tigani ("Chris"), appearing pro se, Robert F. Tigani Jr.
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("Bobby"), Christopher Tigani, Jr. ("Christopher Jr."), minor and son of Chris, JTL, and

minor and daughter of Bobby, GFT, (collectively, "Plaintiffs" or "Beneficiaries"), by

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their undersigned counsel, allege, on their own knowledge and on information and

belief as to all other matters, the following for their Verified First Amended Complaint:

1.
NATURE OF THE ACTION

On December 16, 1986, Robert F. Tigani Sr. ("Bob") accepted the

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invitation of his parents James V. Tigani, Sr. ("Pal") and Betty S. Tigani ("Mimi" and

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together with Pal, the "Trustors") to serve as the trustee of a newly-created, generation i

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 skipping, irrevocable trust (the "1986 Trust") which the Trustors placed 72 shares of

NKS voting stock (collectively, the "Trust Shares").

2. For the almost four decades that followed, the Trust Shares represented a

significant share ofNKS and became the company's controlling interest on February 1,

1999. NKS, founded by Pal in 1950, is a Delaware-licensed wholesaler of alcoholic

beverages, holding the exclusive distribution rights to top-selling beer brands such as

Anheuser-Busch, InBev ("AB"), Corona, and Samuel Adams. This NKS stock is the

only thing of value that has ever been held by the 1986 Trust, as it has never held any

other asset. The Trust Shares have purposefully never yielded a dividend or otherwise

generated income.

3. In March 2013, Bob caused the NKS board of directors (the "NKS

Board") to issue 37.5% ofNKS's outstanding voting stock to himself, which, increased

Bob's personal holdings ofNKS voting stock to 64% of the outstanding shares. In this

way, Bob unilaterally shifted voting control of NKS from the 1986 Trust to himself.

4. Bob willfully concealed the change-of-control in NKS from Chris and

Bobby for more than five years. Indeed, it was not until June 2017, when confronted

by Chris and Bobby, that Bob reluctantly revealed to them the self-dealing stock

transaction that wiped out the value of the 1986 Trust's only asset. At the same time,

Bob also admitted to Chris and Bobby that he had never planned to reveal the change-

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 of-control transactions to either of them; rather, Bob intended his sons learn of the

change-of-control only after he died.

5. Prior to disclosing the dilution of the 1986 Trust, Bob disclosed to Chris

and Bobby that he designated, as successor trustee of the 1986 Trust, his lawyer as

trustee and individually and NKS' newest board member, Steven R. Director

("Director"). This designation occurred just five weeks after the change-of-control

transaction in April 2013 and was also never disclosed to Bobby and Chris. It would

be the second time Bob would disrespect the overarching intent of the 1986 Trust, viz.,

to ensure that NKS-the family business that Pal founded and he and Mimi cultivated

for decades-would remain perpetually in the control of their lineal descendants.

6. Bob is also the trustee of another generation-skipping trust, which was

established by his mother, Mimi, in 1986 (as amended, the "BST Trust"). Mimi's chief

intent in setting up the BST Trust was to preserve her personal assets so they could be

transferred to her only then-living grandchildren, Chris and Bobby. Upon Mimi's death

in 1990, Bob became the sole trustee of a trust share of the BST Trust. Since then, Bob

has (i) grossly mismanaged the BST Trust by failing to preserve-much less

maximize-its value, (ii) appropriated BST Trust assets in the form of an interest-free

loan to enrich himself and his third spouse (namely, by acquiring a condo in Florida and

a personal jet which is now over a half-century old and of negligible financial value),

and (iii) failing to disclose his self-dealing transactions to the remainderman

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 beneficiaries of the BST Trust. Conservatively, the value of the BST Trust should at a

minimal interest rate, should be in excess of $2 .2 million, but instead, its current value

is roughly $300,000 (or approximately 10% of $2 million) having lost more than 30%

of its value since 1990.

7. In short, and as detailed below, Bob has committed numerous violations

of his fiduciary duties owed to Plaintiffs, exhibited deep hostility and personal animus

to Plaintiffs, particularly Chris and Bobby, and otherwise demonstrated his unfitness to

continue to serve as the trustee of the 1986 Trust and the BST Trust.

8. Plaintiffs seek (inter alia): (i) restoration of over $50 million in value and

the controlling interest in NKS intentionally diluted out of the 1986 Trust; (ii) a

declaration that Bob's actions constitute willful misconduct and breaches of his

fiduciary duties and a breach of trust; (iii) removal of Bob as trustee of the 1986 Trust

and the BST Trust; (iv) appointment of the successor trustees identified below; (v) an

order requiring Bob to disgorge ill-gotten gains reaped from his misconduct; (vi) an

award of monetary damages to account for interest and lost principal appreciation of

the corpus of the BST Trust; (vii) an order that Bob's 128 shares ofNKS voting stock

to be held in constructive trust; (viii) an award of damages in an amount sufficient to

recompense Plaintiffs for the harm caused by Bob's oppressive conduct and breaches

of fiduciary duty; and (xii) an award of all fees and costs associated with this action.

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 PARTIES

9. Plaintiff Christopher J. Tigani is a Delaware resident, a vested beneficiary

under the 1986 Trust and the BST Trust, the son of defendant Robert F. Tigani, Sr., the

father of co-plaintiffs, Christopher Jr. and JLT, the biological grandchild of the Trustors

of the 1986 Trust and the BST Trust, brother to co-plaintiff Robert F. Tigani, Jr., and

uncle to co-plaintiff and minor GFT.

10. Plaintiff Robert F. Tigani, Jr. is a Delaware resident, a vested beneficiary

under the 1986 Trust and the BST Trust, the son of defendant Robert F. Tigani, Sr., the

biological grandchild of the Trustors of the 1986 Trust and the BST Trust, the father of

co-plaintiff and minor GFT, brother to co-plaintiff Christopher J. Tigani, and uncle to

co-plaintiffs Christopher Jr. and JLT.

11. Defendant Robert F. Tigani Sr. is a Florida resident, the sole trustee of the

1986 Trust and the BST Trust, the chairman of the NKS board, the putative majority

shareholder of NKS, the second-born child of the Trustors of the 1986 Trust and the

BST Trust, the father of plaintiffs Christopher J. Tigani and Robert F. Tigani, Jr., the

grandfather of plaintiffs Christopher Jr., JLT, and GFT.

12. Nominal Defendant N.K.S. Distributors, Inc. is a Delaware corporation,

founded in 1950, and a Delaware-licensed wholesaler of alcoholic beverages.

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 RELATED NON-PARTIES

13. James V Tigani, II ("Uncle Jimmy") is a Florida resident, the first-born

son of the Trustors of the 1986 Trust and the BST Trust, the older brother of defendant

Robert F. Tigani, Sr., and uncle to plaintiffs Christopher J. Tigani and Robert F. Tigani,

Jr.

14. James V Tigani, Sr. ("Pal"), was the co-founder of NKS, a co-trustor of

the 1986 Trust, the father of sons James V Tigani, II and defendant Robert F. Tigani,

Sr., and the grandfather of plaintiffs Christopher J. Tigani and Robert F. Tigani Jr.

15. Betty S. Tigani ("Mimi") was a co-trustor of the 1986 Trust, the trustor of

the BST Trust, the mother of sons James V Tigani, II and defendant Robert F. Tigani,

Sr., and the grandmother of plaintiffs Christopher J. Tigani and Robert F. Tigani Jr.

JURISDICTION

16. Defendant is subject to personal jurisdiction in this Court for purposes of

this action.

17. This Court has subject matter jurisdiction over the claims averred in this

action pursuant to 10 Del. C. § 341, 10 Del. C. § 6501, and 12 Del. C. §§ 3327, 3581-

2.

STATEMENT OF FACTS

18. Beginning in 1986, Pal and Mimi created four generation-skipping

transfer trusts (collectively, the "Family Trusts") to create income and transfer real

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 property to their sons, Bob and Uncle Jimmy and their grandchildren, Bobby and Chris.

Each of the four Family Trusts designated Bob as the lifetime income beneficiary, but

none of them transferred any trust property directly to him.

A. The Trustors' Intent & the 1986 Trust

19. The Trustors' most valuable asset was their ownership and control of

NKS, and they were determined above all to protect this cherished family asset for

generations of future Tigani's, particularly their only then-living grandchildren, Chris

and Bobby. The Trustors' intent has been corroborated by multiple sources close to the

situation, including Bob, Uncle Jimmy, Leo J. Renzette ("Renzette"), who worked

closely with the family for four decades, and Joanna Reiver ("Reiver"), the lawyer who

drafted the 1986 Trust and the other Family Trusts. According to Reiver's sworn

testimony in prior litigation, Pal and Mimi "wanted the NKS stock to stay in the family"

"for the benefit of their grandchildren." Even Bob's second wife, Linda Collins, swore

an affidavit, that Pal and Mimi, "would never accept any result that did not have Chris

and Bobby owning NKS and the business staying in the family."

20. The Trustors' desire to keep control of NKS exclusively within their

bloodline and out of the hands of non-lineal descendants was not theoretical. Before

the creation of the 1986 Trust, Pal and Mimi had gifted 53 shares ofNKS voting stock

to Bob. In prior litigation, Bob admitted under oath that:

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 [Pal] told me that the original 53 shares that were gifted were supposed to
have been in a generation-skipping trust, but the attorney at that time did not
do that and when [Pal] found out that they did not do that, the remaining [72]
shares were put into a generation-skipping trust [i.e., the 1986 Trust]"

21. Pal and Mimi came to believe that Bob could not be trusted to carry out

their desire to keep ownership and control of NKS exclusively in the hands of their

bloodline. The chief source of Pal and Mimi's concern was the impending dissolution

of Bob's second marriage, which they feared, could result in Bob's NKS stock ending

up in the hands of his second wife. To prevent that from happening, Pal and Mimi

created the 1986 Trust, a generation skipping vehicle in which they placed a sufficient

number of NKS voting shares to preserve ownership and control in NKS for their

grandchildren, Chris and Bobby, upon reaching the age of 25.

22. Consistent with the Trustors' intent, Article 2(A) and (B) of the 1986 Trust

states in part:

A. During any period in which ROBERT F. TIGANI is

for any reason unable to serve as trustee hereunder ... and in
any event upon his death, we appoint JAMES V. TIGANI,
JR., as successor trustee[.] ... If JAMES V. TIGANI, JR.
fails to qualify or ceases to act, we appoint as substitute
successor trustee the individual( s) or corporation, or both,
selected from time to time by the following in the indicated
order of priorities:

1. ROBERT F. TIGANI.
2. JAMES V. TIGANI, JR
3. ROBERT F. TIGANI, JR. and CHRISTOPHER J.
TIGANI ("our grandchildren"), acting jointly, or, if either such
grandchild is unable to so designate, the survivor of them

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 23. Pal and Mimi would take no chances with their assets and their

grandchildren Article 2(B) of the 1986 Trust states:

Despite the foregoing, after trust shares are established for

the benefit of ROBERT F. TIGANI, JR. and
CHRISTOPHER J. TIGANI hereunder, and upon reaching
age 25, each such grandchild shall be entitled to serve as
trustee of his separate trust share, and each such grandchild
shall be entitled to designate the successor trustee of his
separate trust share. Such powers shall include the power
to remove or replace an existing trustee, at any time and
from time to time, and to designate successor trustee(s)
of such trust share. (emphasis added).

24. Further evidencing the Trustors' testamentary intent, the 1986 Trust

expressly excludes non-bloodline descendants, specifically stepchildren, from its

definition of the term "issue." Article 14(C) of the 1986 Trust states:

Definitions: C. "Child," "Children," or "Issue:" The

definition includes both natural children and children
adopted while minors ... provided, that any adopted child
who was a step-child prior to the adoption (i.e., a child of
the adopting parent's spouse) shall not be included in the
determination of "child " "children " or "issue" under this
'
document. (emphasis added) 1
'

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In 2013, contrary to his parents' well-known wishes, Bob expanded the definition of"issue"
in the third revision of the 1987 Revocable Trust, stating in pertinent part:

An individual legally adopted while under age twenty-one (21)

shall be treated as a natural child and an issue of the adopting
individual and an issue of the ancestors of the adopting
individual, and further, the children and issue of such adopted

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 25. In 1999, Bob and Uncle Jimmy split NKS into two distinct businesses;

Uncle Jimmy, along with Renzette, took NKS' wine and spirits portfolio no longer with

any ties to NKS; and the 1986 Trust and Bob kept the beer brands and the NKS name.

Immediately after, Chris assumed day-to-day control of NKS. Recognizing that his

parents' legacy and testamentary wishes would be fulfilled, Uncle Jimmy renounced

his designation as sole successor trustee of the 1986 Trust in mid-2000.

26. Article 7(A), the only exculpatory clause found in the 1986 Trust, states

in pertinent part:

... No exercise of the discretionary authority given to the

trustee under this paragraph will subject the trustee to
liability to any beneficiary.

B. The BST Trust

27. In October 1986, Mimi, the matriarch of the Tigani family during her adult

life, caused the creation of the BST Trust to safeguard her personal assets, generate a

limited amount of income for Bob, and ensure the principal appreciated for decades and

then ultimately passed to Chris and Bobby.

individual shall be deemed to be the issue of the adopting

individual and his or her ancestors.

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 28. The BST Trust was to be funded with the net proceeds from the sale of her

primary residence after her death. Mimi died in 1990 and her home was sold in 1993.

The transaction netted $545,000, all of which was to be deposited in the BST Trust.

29. But instead, Bob, now the sole trustee of the BSTTrust, diverted $145,000

of the sale proceeds and applied those funds to the purchase of a condominium in

Florida, reducing BST Trust's cash holdings to $400,000.

30. Soon after settlement, Chris and Bobby asked for a portion for deposits on

their first homes and an engagement ring. In late 1993, Bob, as trustee of the BST Trust,

gave Chris and Bobby collectively $75,000, further reducing the corpus to $325,000.

31. Bob's first "investment" of BST Trust funds was to deposit cash into NKS

as working capital, for which he charged NKS interest of 6% and pocketed those

interest payments for himself.

32. Article l0(A)(ll) of Mimi's Will authorized the use of BST Trust funds

as loans, provided there is but expressly conditions such authority on the ed the use of

funds from the BST Trust as loans to be used loans, provided "adequate security and at

a reasonable rate of interest." Despite Bob being subject to this mandatory condition,

The second-and only other-"investment" of BST Trust funds that Bob made was

another self-interested transaction in which he appropriated $119,000 from the BST

Trust to purchase a twin-engine aircraft for himself (the "Ty-Air Loan"). The terms of

the Ty-Air Loan bear none of the hallmarks of a commercially reasonable, arms' length

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 transaction. Bob signed the note documenting the "loan" as trustee of the BST Trust,

on the one hand, and the sole member of Ty-Air, LLC, on the other hand. Exploiting

this conflict of interest, Bob caused the BST Trust to make the Ty-Air Loan without

requiring Ty-Air to put up any security, or to pay any interest to BST Trust, or a specified

maturity date. The omission of these basic terms violated Article l0(A)(ll) of Mimi's

Will, which provides that any loan comprised of BST Trust funds must be supported by

"adequate security" and be charged at "a reasonable rate of interest."

33. Bob disclosed neither the existence nor the terms of the TY-Air Loan to

Chris and Bobby, who first learned of the transaction during this litigation.

34. Bob has also abused his trustee powers in other ways. Bob has never

provided Chris or Bobby with an accounting of the BST Trust; he made his wife and

her family beneficiaries of the BST Trust, which Mimi never intended; he has given his

wife the use of the BST Trust principal until her death; and, according to Bob, it is not

until his wife dies that Ty-Air, LLC will pay back the interest- and security-free loan

that Bob caused the BST Trust over 25 years ago.

C. The Secret Stock Issuance Surfaces in February 2012

35. On February 3, 2012, Bob writes, "Last night's meeting with them was

very encouraging ... Jim and Leo are willing to invest 5 million in the following way.

Jim would buy the building for 2.5 million plus takeover the loan. Leo will give his son

$2.5 million to put into the company. In return he wants his son to come to work which

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 I think isn't a problem. Leo doesn't want to own the company ever and is doing this to

secure the business for the family ... Let me know your thoughts."

Intrigued, Forbes acknowledges Renzette is putting in the $2.5 million and should get

stock for the investment, "How would Leo's son put the money into NKS? Needs to be

equity to satisfy AB. Could he get approved? How would the % of equity to give him

for $2.5mm be determined. This might work."

36. Bob responds favorably, "I don't think Leo is looking for equity. Would

be either a loan or something, I'm not sure. He said his repayment would be his son's

salary. Definitely much more attractive to work with them than what we're doing ... "

3 7. But Renzette wrote to Bob just two days later on February 5, 2012, telling

him his son does want stock for his investment: "Anthony would buy stock in NKS and

become a full-time active employee. He can send you a resume so you can evaluate his

professional skills. He would invest $2.5m."

38. Bob believed it would be more "attractive" to work with Leo ... Renzette

writes, "Right on the attractiveness but Leo's$ would have to be equity to meet BofA

needs, as would the cash from Jim." For his part, Bob replied, "If the money came to

me and I put it in that's the same correct? Maybe Leo's thinking is his son lends me the

money." Forbes respond, "If he lends you the money, his "interest" is his salary, and

you put the money in as subordinated debt, or even issue yourself new shares, that could

work." (emphasis added) Uncle Jimmy and Renzette would still invest $2.5 million

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 each buying NKS' real estate. But NKS would classify Renzette's $2.5 million as a

"loan" to Bob, so he could take credit for making the capital infusion and, in tum, issue

himself the stock that Renzette originally contemplated the company issue to Anthony

Renzette.

D. Bob Is Formally Issued 75 Shares NKS Stock on March 7, 2013

39. Bob took title to 75 shares ofNKS voting stock, individually and with it,

the control premium worth tens of millions of dollars out of the Trust. But admitted "at

the time ... the issuance of the 75 shares of voting stock to you was being considered,

who was looking out for the trust's interest and the beneficiaries?" Bob testified, "I

guess indirectly, I was looking out for the trust in that situation."

40. When Bob was called upon to vote the trust shares (then still in the

majority), Bob abstained, despite his fiduciary duty as Trustee to preserve the property

held in the 1986 Trust. The motion passed with three votes in the affirmative and none

in the negative.

41. During the September 29th Meeting, Bob revealed that his understanding

was that NKS authorized 10,000 shares to be issued, but only 200 of which had yet

been issued.

42. Bob also represented to his sons that he personally injected $2.5 million

and received 75 shares causing a change-of-control transaction from the 1986 Trust to

himself. He said Bank of America required that he, "get something for it."

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 43. During the September 29th Meeting Bob further-albeit reluctantly-

disclosed to Chris and Bobby that he believed he had no obligation to inform the

beneficiaries of the stock issuance and moreover that, up to that point, he had no

intention of informing the beneficiaries of the stock issuance before his death. Bob

added that, "I didn't know that I needed to, and I don't know that I even thought about

telling you or your brother, five years ago, that that's what happened."

44. In a communication to Anheuser-Busch, Bob, through his agent, in an

altogether different description of the impetus for and the particulars of the stock

transaction stated:

In mid-July 2012, as part of a refinancing of NKS, Bob

Tigani personally put $2.5 million into the Company. The
accountants are recommending that the Company issue
stock to Bob in exchange for the funds, and we are
proposing to issue approximately 75-77 shares to him
personally, effective July 13, 2012. This would shift the
majority of ownership from Bob's 1986 irrevocable trust to
Bob personally, but the stockholders remain the same.

45. Yet these representations to Anheuser-Busch are discredited by NKS' own

accountant Charles Bramley, CPA, ("Bramley"). He testified that Withum, "could have

issued NKS' financial statements if the company treated the infusion as debt" and that,

in fact, it was, "NKS who told [him] ... to classify the $2.5 million infusion" as equity

rather than debt.

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 E. Bob Planned the Stock Issuances Nearly a Year Before He Now
Claims

46. Bob has testified with respect to the stock issuance, that he, "didn't ask for

any [stock], didn't know about any, and it wasn't really on my mind ... I wasn't looking

for stock." But these sworn statements are contradicted by the personal notes Bob

recorded at NKS 's May 18, 2012 board meeting. Bob took these notes during the board

meeting two months prior to the Bank Refinancing on July 13, 2012, and nearly eight

months before NKS began "finalizing the 2012 audit" in March 2013.

47. On the agenda for the May 18, 2012 NKS Board meeting were the

following items: (i) 399 LLC bought the real estate at 399 New Churchman's Road and

has M&T mortgage balance of $8.5 million; (ii) NKS sold its Milford property for $2.5

million to the new LLC; (iii) "Jim and Leo" contributed $2.5 million each to the new

LLC; (iv) Bob "repaid" the $2.5 million note to 399, LLC at the applicable federal rate

of .7%; and (v) additional stock issued for $2.5.

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 NKS Distriboturs Utu1r<l
o( OirN:h>N Meeliug
May JS, 2012at 2:00 P. M.

Inc,
NKS t)istrJbutol"$,
Hoard Room
399 NewChurchman,;Rd
New Castle,DE 19720

AGEN1)A

F. Bob's "Capital Infusion" Was Illusory

48. According to Renzette, a principal of 399 LLC, the transaction that NKS

booked as a $2.5 million capital infusion Bob made to NKS is complete fiction.

Renzette testified that, "399 borrowed $8.5 million" and "the checks [Uncle] Jimmy

and I wrote for two and half million each," made up the $13.5 million needed to

purchase the two warehouse office buildings. The "Promissory Note" which

purportedly documents a loan from 399 LLC to Bob, was not loan a loan at all.

2
The arrow that appears in the image above was added for ease of reference.

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 49. As Renzette explained, "399 Associates has a note receivable from Bob

Tigani, Sr., and that was to get his 20 percent of the LLC." As for a loan to Bob

individually, Renzette says, "No. I don't think so. Two and half million is on the

settlement sheet was used to pay for Milford. The other $11 million was used to pay

the building in New Castle."

50. Uncle Jimmy and Renzette contributed $2.5 million each to 399 in five

separate transactions. The ending balance on July 11, 2012 was $5.0 million. On July

12, 2012, 399 wired $5.0 million to WSFSBank to Bayard's Escrow Account, as

"Settlement Agent." After the wire, there was $0.00 in the 399 account.

51. That Bob's "Capital Infusion" was not the product of a "loan" from 399,

LLC is further corroborated by Uncle Jimmy's email depicted below:

Message-
From: james taylor IJvW@yahoo.comj
Sent: 6/27/2012 4:02:03 PM
To: Robtfft Ttgani frtigani@nksdistributors.com J
CC; Leo Rcmzettc!leoronzettc1@)veri.mn,nat};
Ernrlov@{?lzufon,com
Subject: LEASEANOLlC

THERE IS NOTHINGMORE TO DfSCUSSi THE TERMS OF THE LLC

AND LEASEWERE SET AND AGREED UPON LAST WEEKENDBY
DIRECTORTARLOV YOU ME AND LEO; YOUDO NOTHAVEA LOAN
FROM OR TO THE LLC FOR $2,500,000ANOTHE EQUITY POSTIONS
AGREED UPON (AND INCREASEIN YOUR FAVOR AS ALSO A SHARE
OF OVERAGEOF THE RENTTO YOU ON A MONTHLYBASIS)WERE
CONCESSIONSON OUR PART AND NOT VERY APPEALLINGTO
WELLS FARGO. IF YOU/DIRECTOR/GEORGECONTINUETO TRY TO
CHANGE,WELLS WILL PULL OUT ANDTHE DEAL WILL COLLAPSE.
THEY ARE NOT BLAME FOR THE DELAY IN RECEIVINGTHE
DOCUMENTS!LErS SIGN TODAY AND TRULY MOVE FOREWARD!

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 G. Bob seeks Anheuser-Busch's Approval of the Stock Issuance

52. In 2016, NKS and Bob formally sought approval of the change-of-control

transaction from its primary supplier, Anheuser-Busch and its primary lender, Bank of

America.

53. On the same day, October 26, 2016, Bob, through his agent, requested

approval from Anheuser-Busch that:

for estate planning purposes and federal estate tax

minimization, we have recommended that Bob transfer
some portion of his stock to a family trust and possibly one
of his issue ... As part of this, we would perform a simple
recapitalization of the Company so that Bob and the 1986
trust convert their voting stock into voting and non-voting
stock. (The Company already is authorized to issue non-
voting stock.) This then will enable Bob to gift non-voting
stock and retain voting stock.

H. The March 7, 2013 Stock Issuance was Backdated to July 13, 2012
and Recorded on NKS' 2011 Financial Statement

54. The 2011 NKS Financial Statement was issued on July 26, 2012, less than

two weeks after the bank refinancing. According to the notes to 2011 Financial

Statement, Bob received "non-voting stock" in exchange for $2.5 million the same day

of the refinancing.

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 N.K.S.DISTRIBUTORS,INC.
NOTESTO FINANCIALSTATEMENTS

Oecember31, W11 and 2010

Congruent with the refinancing, the Company issued additional non-voting shares to the Company's lone
shareholderit1returnfor $2,500,000fromthe shareholder.Addlllonally,subsequentto year end, NKSsold Hs
Milfordpropertyto a companywhereNKS'shareholderwas a minorityowner(See Note 9). On May 16,2012,
the Company'sshareholderloaned the Company $375,047througha demand note receivable. The note ls
due on the earHerofthe demand date or December31, 2012 and bears rnterestat 6.25%. On July 10, 2012,
NKS loanedto the Company'sshareholder$479,102througha term note payable. The note is due In full on
December31, 2015, together with principaland interestwhich accruesat the applicable Federal rate.

55. These statements clash with Bob's sworn testimony that he first learned

that he would acquire direct, personal, majority control of NKS was at the March 7,

2013 NKS board meeting.

56. The notes to the 2012 NKS Financial Statement, particularly Note 5, tell

a materially different story. Now the note claimed, "The stock issuance and capital

infusion [were] a requirement to initiate bank refinancing. "3

57. At an in-person meeting in March, 2017, at which Chris, Bob and Director

were present, Chris was told in no uncertain terms that he was never welcome back at

NKS. At the same meeting, Director also informed Chris that the lifetime ban from

working at NKS might also extend his children, Christopher Jr. and JTL. More

pointedly, Director told Chris that his children-Bob's grandchildren-were free to "fill

out an application and apply for a job just like anyone else. John might have a better

chance because his name is not Chris."

3
More recently, however, NKS's general counsel and a board member testified that he did
not, "recall the stock issuance being requirement of the bank."

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 58. At about the same time, Bob confirmed that he had designated Director as

the successor trustee to the 1986 Trust.

59. A number of similar meetings followed during mid-May to September

2017, including one meeting on June 8, 2017 ("June 8th Meeting"). At the June 8th

Meeting attended by Chris, Bobby, Bob and Director, Chris and Bobby voiced strong

opposition to Director ever serving as a trustee of the 1986 Trust, to which Bob

responded, "it doesn't matter anyway . . . Your grandparents trust doesn't own the

company anymore. I do."

60. At the same June 8th Meeting Bob further revealed that he had acquired

majority ownership and control ofNKS in his personal capacity some five years earlier.

At the same time, Bob also admitted he had no intention of disclosing the change-of-

control to either of his sons during his lifetime.

61. After the June 8th Meeting, Chris and Bobby met with the Bob (without

Director) several more times, with no meaningful progress toward a resolution.

I. Chris and Bobby Demand that Bob Provide an Accounting of the

1986 Trust

62. On September 18, 2017, Chris and Bobby delivered to Bob their first

request for a complete accounting of the 1986 Trust, including the production of a

current and complete copy of the NKS stock ledger, certain NKS board meeting

minutes, documentation for the Stock Issuance plus any other transactions pertinent to

the value of the 1986 Trust (among items).

21
 63. By e-mail on September 22, 2017, Bob acknowledged Chris and Bobby's

initial demand for an accounting, without providing a substantive response. More

particularly, in his September 22, 2017 e-mail, Bob stated,"[ a]s the Trustee of the above

referenced trusts, I am hereby acknowledging receipt of your letter dated September 18,

2017, written on behalf of yourselves and your children as the current beneficiaries of

these trusts."

64. Having received no meaningful response to their initial demand for an

accounting, Chris and Bobby delivered a second demand for an accounting to their

father on September 25, 2017.

65. Four days later, on September 29, 2017, father and sons met yet again.

But this meeting proved no more productive than the meetings before it.

J. Bobby is Punished for Filing this Action

66. During the entire month of October, NKS' then-Executive Vice President

and General Manager, Paul Ruggiero ("Ruggiero") pressured Bob to constructively

terminate Bobby's employment with NKS "until a final resolution of this matter."

Ruggerio is on record as having stated, "After reading the [demand] letters, I feel

strongly that Bobby Jr. must be placed on paid administrative leave immediately."

67. Effective January 1, 2017, Bobby became a member of the NKS Board.

In that capacity, Bobby made a formal request for certain basic books and records, such

22
 as NKS' stock ledger. For over seven months, Bobby's requests were all together

denied, without any justification.

68. Chris and Bobby commenced this action on November 3, 2017, at which

time Bobby was an NKS employee and a member of its Board of Directors.

69. Less than 24-hours after the original complaint was filed, Bob,

individually and as trustee, executed another "Written Consent of the Sole

Stockholder," removing Bobby from NKS Board.

70. The next day, Bob hastily called a special meeting of the NKS Board, at

which the NKS Board unanimously (save Bob, who purported to abstain) voted to place

Bobby on "Administrative Leave" which carried with it a 75% cut in pay and benefits

stepped-down over the next five weeks.

COUNTI
(Breach of Trust - Removal of Trustee of the 1986 Trust
pursuant to 12 Del. C. § 3581)
71. Plaintiffs incorporate the foregoing paragraphs as if fully set forth herein.

72. Plaintiffs are vested beneficiaries under the 1986 Trust.

73. As trustee of the 1986 Trust, Bob owes uncompromising fiduciary duties

to the beneficiaries of the 1986 Trust.

74. In breach of his fiduciary duties, Bob placed his personal interest above

the interests of the beneficiaries of the 1986 Trust by: (i) taking title to 75 shares ofNKS

voting stock issued to himself, individually; (ii) usurping the voting control premium

23
 of NKS from the Trust for himself; (iii) intentionally withholding material details from

Bobby and Chris that he was under a duty to share; and (iv) causing or enabling the

Stock Issuance which benefited Bob to the detriment of the plaintiffs as beneficiaries of

the 1986 Trust.

75. Bob's actions contradict the intent of the Trustors of the 1986 Trust, as

expressed in the 1986 Trust instrument and his father's final Will. At the same time,

Bob has frustrated the intent and purpose of the Trusts for his own gain to spite his

children for whom he has repeatedly demonstrated personal animus.

76. Bob has exhibited ongoing hostility toward the plaintiffs as beneficiaries

of the 1986 Trust. Bob has needlessly exposed the 1986 Trust to unnecessary liability.

Bob has also demonstrated an enduring inability and/or unwillingness to learn and

carryout his fiduciary responsibilities as the trustee of the 1986 Trust.

77. Bob is unfit to continue to serve as the Trustee of the 1986 Trust,

warranting his removal from that fiduciary position pursuant to 12 Del. C. § 3 581(b)( 6).

COUNT II
(Breach of Trust - Removal of Trustee of the BST Trust
pursuant to 12 Del. C. § 3581)
78. Plaintiffs incorporate the foregoing paragraphs as if fully set forth herein.

79. Bob failed to properly invest the BST Trust assets prudently by approving

and retaining the personal benefits of the TY-Air Loan.

24
 80. Plaintiffs are entitled to various relief under 12 Del. C. § 3581 (b),

including, without limitation, (i) the immediate removal of Bob as Trustee of the BST

Trust, (ii) the imposition of a lien or a constructive trust over certain property of the

BST Trust, (iii) and order compelling Bob to trace or recover the property of the BST

Trust that he wrongfully disposed of.

COUNT III
(Breach of Fiduciary Duty)
81. Plaintiffs incorporate the foregoing paragraphs as if fully set forth herein.

82. As Trustee of the Trusts, Bob is subject to fiduciary duties to the Trusts

and the beneficiaries. Failing to faithfully and fully comply with a duty or a violation

by the trustee of a duty owed to the beneficiaries constitutes a breach of trust. Bob

violated his respective duties by:

(a) engaging in self-dealing through the Stock Issuance to usurp

controlling interest in NKS at the expense of the 1986 Trust
and the intended beneficiaries, violating his duty ofloyalty, his
duty to preserve and protect trust property, his duty of care and
his duty to act in good faith;

(b) purporting to effectuate and legitimize the Stock Issuance

under the false pretense of the Capital Infusion violating his
duty to act in good faith;

(c) concealing from Plaintiffs for years all the facts related to the
Stock Issuance, violating his fiduciary duty of disclosure;

(d) acting contrary to the best interests of the trusts by failing to

seek court approval or the beneficiaries' consent before the
Stock Issuance violating his duty of loyalty and to act in good
faith;

25
 (e) placing at risk the continued relationship with NKS' primary
suppliers by misrepresenting the beneficiaries' actions and the
reasons for the Stock Issuance violating his duty to act in good
faith;

(f) causing NKS to drastically reduce Bobby's salary to prevent

Plaintiff's exposure of Bob's misconduct to judicial scrutiny
and cause Bobby grave economic harm;

(g) failing to act as a prudent person when investing the BST Trust
assets violating his duty to preserve trust property and to act as
a prudent investor;

(h) failing to establish trust shares and inform Chris and Bobby of
their rights under the trust to remove and replace an existing
trustee, and

(i) Bob's intentional acts and omissions constitute willful

misconduct and/or knowing violations of his contractual,
statutory and common law duties to the plaintiffs.

(j) failing to disclose information to the beneficiaries they needed

to protect their rights constitutes willful misconduct and, in bad
faith, ignored both Bob's fiduciary duties to the shareholders
ofNKS and the interests of the beneficiaries of both Trusts.

83. Bob's breaches of his fiduciary duties have caused serious, ongomg

economic harm to Plaintiffs.

84. Plaintiffs have no adequate remedy at law.

COUNTIV
(Declaratory Judgment pursuant to 10 Del. C § 6502, et seq.)

85. Plaintiffs incorporate the foregoing paragraphs as if fully set forth herein.

86. An actual and justiciable dispute exists between the parties regarding

Bob's administration of the 1986 Trust and the BST Trust.

87. Plaintiffs are entitled to a judicial declaration that:

26
 (a) Bob's administration of the Trusts is in contravention with
the Trustor 's intent and constitutes a breach of trust and
breaches of his fiduciary duties;

(b) the Trustor 's intended for their grandchildren to benefit from
the Trust by voting and controlling NKS stock as their own
trustee by age 25;

(c) Bob's purported designation of George Forbes, Linda A.

Tigani and Steven R. Director as co-successor trustees do
not serve the purpose of the Trusts and are therefore null,
void and unenforceable;

(d) Bob suffers from a personal conflict of interest with the

beneficiaries of the 1986 Trust and the written consents: (i)
regarding Bobby's removal from NKS' board of directors;
(ii) regarding Bob's lifetime employment contract and
spousal death benefit; and (iii) issuing any or additional
voting or non-voting stock to Bob, are null and void.

COUNTY
(Void the 2013 and 2016 Certificate Amendments)

88. Plaintiffs incorporate the foregoing paragraphs as if fully set forth herein.

89. In 2013 and 2016, the board approved amendments to NKS' Certificate of

Incorporation authorizing new stock and classes of stock. Despite claiming otherwise,

there was no valid business reason for the Amendments. The NKS Board's only

purpose in issuing stock to Bob was to transfer controlling interest in NKS from the

1986 Trust to Bob individually and relieve Bob of his responsibilities as a fiduciary.

The NKS Board knew the 1986 Trust would be diluted and intended to deprive the

Plaintiffs of benefits of majority trust control in NKS.

27
 90. Another illicit purpose of the Amendments was to distribute money to

Bob's chosen beneficiaries and perpetuate his and his designee's wrongful control over

NKS.

91. The Amendments are unfair to Plaintiffs or NKS since Bob initiated and

timed each of them to facilitate a faithless change-of-control. The structure of the non-

voting stock, notably its non-voting rights, serves only to distribute NKS' profits which

by right belong to the 1986 Trust. Non-voting stock also eliminates any dilution of

Bob's now-individually held controlling interest upon issuing additional shares.

92. Plaintiffs have no adequate remedy at law.

COUNT VI
(Award Attorney's Fees and Costs Under 12 Del. C § 3584)

93. Plaintiffs incorporate the foregoing paragraphs as if fully set forth herein.

94. But for Bob's willful misconduct the bringing this action would not have

been necessary. For NKS, the 1986 Trust, and its beneficiaries to bear the costs to bring

this action including the attorneys' fees paid unnecessarily incurred because of Bob

would be inequitable.

95. Plaintiffs are to entitled to an order requiring Bob to pay Plaintiffs

attorney's fees and costs, associated with this litigation pursuant to 12 Del C. § 3584.

28
 PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully request that the Court enter judgment

against the Defendant on all counts and more specifically:

A. finding that Bob breached his fiduciary duties owed to Trusts and the
Plaintiffs;

B. finding Bob's actions were undertaken in bad-faith and constituted

willful misconduct;

C. awarding Plaintiffs' the amount of damages sustained as a result of

Defendant's breaches of fiduciary duty, in an amount to be determined
at trial, together with pre-judgment and post-judgment interest thereon
at the maximum rate allowed by law, in an amount to be proven at trial
through the payment of money damages under 12 Del. C. §§ 3581(3),
3582;

D. awarding Bobby all of his back-pay with interest;

E. awarding damages of $450,000 for the misappropriated recovery from

accounting malpractice lawsuit against WWD;

F. permanently removing the Defendant as trustee of the 1986 Trust and

the BST Trust, pursuant to 12 Del C. §§ 3327(1) and 3581(6)

G. Appointing Leo J. Renzette and Robert F. Tigani, Jr., co-Trustees of the

1986 Trust pursuant to 12 Del. C.§ 3581(5);

H. declaring that Bob breached his fiduciary duty of prudent investment

for (i) failing to invest the BST Trust Assets properly; (ii) failing to
ensure Trust property was productive; (iii) willfully engaging in self-
dealing; and (iv) failing to disclose information;

I. declaring that any NKS stockholder's written consents executed after

July 13, 2012 to date are invalid;

J. declaring that the Trustor's intended is for Bobby and Chris to be the
trustees of their own equal trust shares of the 1986 Trust upon each of
them attaining the age of 25;

29
K. Imposing a constructive trust for the benefit of Plaintiffs on the
authorized or issued NKS stock to benefit the beneficiaries of the 1986
Trust under 12 Del. C. § 3581(8);

L. voiding the Amendments to NKS' Certificate of Incorporation since

July 13, 2012.

M. permanently enjoining the Defendant from converting or using Trust

income or NKS assets or taking any further actions regarding Trust
property;

N. Directing the Defendant to provide Plaintiffs a full accounting of the

1986 Trust and the BST Trust;

0. Requiring disgorgement of any ill-gotten gains or monies paid to Bob

from February 20, 2012, including salary in excess of market norms
and interest payments;

P. An order for imposing constructive trust over any economic or financial

benefits generated by Bobs tortious conduct;

Q. In the determination of damages, utilizing the principle of

Impoundment under Restatement (Second) of Trusts §257;

R. awarding Plaintiffs damages to be determined at trial relating to lost

wages due to trustee's failure to establish trust shares;

S. Holding Defendant liable for Plaintiffs costs and expenses of this

action, including attorney's fees, expert fees, accountancy fees, and
related expenses;

T. order Defendant to reimburse NKS for all of the costs, expenses, and
attorneys' fees unnecessarily paid and incurred defending this action;

U. Awarding all pre-and post-judgment interest on all amounts due; and;

V. Granting the Plaintiffs such other and further relief as maybe just or
equitable given the circumstances.

30
 BERGER HARRIS LLP

Isl John G. Harris

John G. Harris (DE No. 4017)
David B. Anthony (DE No. 5452)
1105 N. Market Street, 11th Floor
Wilmington, Delaware 19801
(302) 655-1140 (telephone)
(302) 655-1131 (fax)
jharris@bergerharris.com
danthony@bergerharris.com

Attorneys for Plaintiffs, Robert F.

Tigani, Jr., and minor children
CJT Jr., JLT and GFT

Dated: June 5, 2019

Isl Christopher J. Tigani

Christopher J. Tigani
prose
3 3 91 Concord Pike
P.O. Box 7752
Wilmington, De. 19803
Mobile: (302) 544-2843
ctigani@wcw-inc.com

31
 CERTIFICATE OF SERVICE

I, John G. Harris, hereby certify that I caused a true and correct copy of the

foregoing VERIFIED FIRST AMENDED COMPLAINT to be served upon the

following in the manner and date described below:

VIA FILE AND SERVEXPRESS

T. Brad Davey
Daniel Rusk IV
Potter Anderson & Corroon LLP
1313 North Market Street
Wilmington, Delaware 19801

Stephen B. Brauerman
Brett McCartney
BAYARD, P.A.
600 N. King Street, Ste 400
Wilmington, Delaware 19801

VIA E-MAIL

Christopher J. Tigani, Sr. (Pro Se)

ctigani@wcw-inc.com

BERGER HARRIS LLP

By: Isl John G. Harris

John G. Harris (I.D. No. 4017)
jharris@bergerharris.com

Attorneys for Robert F. Tigani, Jr.,

and minor children, CJT Jr., JLT and GFT
Dated: June 5, 2019
 EFiled: Jun 05 2019 05:25PM EDT
Transaction ID 63327411
Case No. 2017-0786-KSJM
VERIFICATION

STATEOF t>e-c~w~~ )
) SS:
COUNTY OF Me;w ~~TL-~ )

I, CHRISTOPHER J. TIGANI, SR., being duly sworn, depose and say that I

have read the foregoing Verified First Amended Complaint believe the factual

averments made therein are true and correct to the best of my knowledge,

information and/or belief.

CHR OPHER J. TIG

\\!//Ji l/ !
PLAINTIFF
i I, I
'I ./
, i I
, I / () , , , ,

' ' ', ;\'''·.··. +t;

. 'swoRNT "BEfoRE
,\ .
ME this
' ' )
5 day of June, 2019
·.' I

·. I
 EFiled: Jun 05 2019 05:25PM EDT
Transaction ID 63327411
Case No. 2017-0786-KSJM
VERIFICATION

STATEOF 't>~~w~~ )
) SS:
COUNTYOF N'2:V'J C-P6TL-e: )

I, ROBERT F. TIGANI, JR., being duly sworn, depose and say that I have

read the foregoing Verified First Amended Complaint believe the factual averments

made therein are true and correct to the best of my knowledge, information and/or

belief.

/-H
SWORN TO BEFORE ME this __ day of June, 2019

NOTARY PUBLIC