Tort/Negligence – Defamation – Libel & Slander Per Se – Press Release – ‘Hostile Takeover’ & ‘Predator’

Eli Global, LLC v. Heavner (Lawyers Weekly No. 011-390-16, 17 pp.) (Ann Marie Calabria, J.) Appealed from Durham County Superior Court (Orlando Hudson Jr., J.) N.C. App.

Holding: A press release, which called plaintiffs “predators” who attempted a hostile takeover of defendant’s businesses, gives plaintiffs a basis for claims of libel and slander per se.

We reverse the trial court’s grant of defendant’s motion to dismiss.

After plaintiffs declined to buy defendant’s businesses (the UD entities), plaintiff Eli Global, LLC’s affiliate UDX, LLC, bought defendant’s and the UD entities’ loans from their bank, provided written notices of default, and demanded payment. The UD entities filed for bankruptcy protection and issued a press release that said, among other things, that UDX “gave notice that it intended to declare [the UD entities’] loans in default, jeopardizing assets owned by companies related to [UD entity] University Directories.” The press release also referred to plaintiffs as “predators” who had begun as potential partners and ended up attempting a hostile takeover. Several local newspapers published articles based on the press release.

Plaintiffs allege that their business is “to invest in companies as a going concern, which at times includes negotiating to purchase other businesses or their assets.” Accordingly, defendant’s characterization of plaintiffs as “potential business partners [who] turn[ed] out to be predators” impugned them in their special trade or occupation.

Defendant’s assertion that plaintiff Lindberg and UDX “gave notice that [they] intended to declare other loans in default, jeopardizing assets owned by companies related to University Directories” is a statement of verifiable fact which may be proven true or false. Although some of defendant’s remarks may appear to express an opinion, a person cannot preface an otherwise defamatory statement with “in my opinion” and claim immunity from liability.

By stating, “What we thought were going to be honorable purchasers of a good company …,” defendant clearly means that plaintiffs are not, a harmful imputation given that plaintiffs’ particular trade is buying and investing in other businesses.

Viewing defendant’s remarks within the four corners of the press release and as ordinary people would understand them, we do not believe that the average readers of Chapelboro and The News & Observer would read “predator” to mean “a company that buys or tries to buy another company that is in a weaker financial position,” as defendant contends on appeal. Even assuming, arguendo, that readers of The Triangle Business Journal might immediately recognize this business definition, defendant’s defamatory meaning is nevertheless revealed by his statements that he has “never encountered anything like this” and “will certainly litigate this matter.”

Plaintiffs stated a claim for libel and slander per se sufficient to withstand defendant’s motion to dismiss.

Because the trial court’s dismissal of plaintiffs’ unfair trade practices claim was predicated on its determination that plaintiffs had failed to state a claim for defamation, we conclude that the trial court also erred in dismissing plaintiffs’ claim for unfair trade practices. Furthermore, having determined that the trial court erred by dismissing plaintiffs’ unfair trade practices claim, we necessarily conclude that the court also erred by awarding attorneys’ fees to defendant pursuant to G.S. § 75-16.1.

Reversed and remanded.