Filippi family in legal battle

Fri, 04/21/2017 - 10:00am

The Filippi family is in a legal fight for control over a Trust that owns one of Block Island’s most iconic establishments. 

Steve Filippi, and his mother Marion, filed a lawsuit against Blake Filippi, a state representative, and his other brother, Paul Filippi, on Dec. 5, 2016. The suit contends that Blake and Paul had attempted, through what the documents in the lawsuit describe as a “power grab” to “remove Marion and their brother Steven, as managers of” the family Trusts, which owns Ballard’s Inn, among other properties. 

Blake, a member of the state House of Representatives from District 36 who is also the Minority Whip, and Paul, filed a countersuit on Dec. 31, 2016, stating they “deny any allegations of wrongdoing,” and further state that their mother Marion and brother Steve had “breached fiduciary obligations.” 

According to a timeline provided by Paul Filippi: “Paul and Blake Filippi discovered a bank loan had been obtained improperly, without their knowledge, by a family company (Ballards) that they managed with their mother and brother.”

The family Trust was created in December 2007 by Marion Filippi, with Steven, Blake and Paul Filippi named as “initial co-trustees.”

At the heart of the matter, according to an amended filing by Marion and Steve Filippi, is a $2.5 million loan that was taken out to “refinance existing debt,” and was done so “without obtaining consent of a majority of the managers as required by Ballard’s Operating Agreement...”

The lawsuit states that “In October 2014, Ballard’s LLC took out a loan with BankRI for approximately $2.5 million… The loan proceeds were used to retire a previous loan...” In May 2015, a second loan for $1.5 million that was to be secured “in part by Ballard’s LLC real estate” was scheduled to be executed for the purchase of the Hotel Manisses. According to the lawsuit, on Friday, October 16, 2015, “three days before the Loan was scheduled to close, Blake contacted Marion and asked to meet with her the next day.”

On October 17, 2015, according to the lawsuit filed by Marion and Steve Filippi, “Blake, a licensed Rhode Island attorney, for the first time asserted that the 2014 Loan was not properly authorized. He further asserted that the scheduled 2015 Loan closing could not occur without his and Paul’s approval. Blake suggested that both the 2014 Loan and the impending 2015 Loan could be considered bank fraud by Marion and punished with a jail sentence.” 

The lawsuit states that Blake Filippi “presented Marion and Steven with a stack of legal documents already signed by Blake and Paul, and demanded that the documents be signed as is.” The lawsuit states that “Under extreme pressure and threats of dire adverse consequences, Plaintiffs signed the transfer documents prepared by Blake.”

In an answer to the complaint filed by Blake and Paul Filippi on Dec. 31, 2016, the filing states “Defendants admit that Blake presented Marion and Steven with legal documents signed by Blake and Paul. Defendants deny the remaining allegations in this paragraph of the Complaint and state that Defendants gave Plaintiffs the opportunity to review the documents and to consult with their legal counsel prior to signing the documents.”

According to one published report, the family wishes the case to go to a jury trial.