More than $700K awarded to former owner of Wyoming gun company

By Sam Knef | Nov 17, 2017

A U.S. magistrate has awarded $626,528 in compensatory damages and $100,000 in punitive damages plus fees and costs to a plaintiff who sued a company that allegedly crossed him after he sold it his interest in his gun business. 

According to the Nov. 6 ruling, Michael Henry Blank had entered into an ownership contract of his company, Sharps Rifle Co. of Wyoming, with Jay Johnston, a person he had met at a gun show in Florida in 2012.

Johnston was interested in acquiring an ownership interest in Blank's company and during their initial discussions they talked about Johnston acquiring trademarks, patents, inventions as well as ideas for inventions that Blank owned, the ruling states.

By December 2012, Johnston had created Broadsword Group LLC, a Wyoming company, which is the named defendant in Blank's suit. Blank went to work for Broadsword in January 2013, with a promise of a 10 percent ownership in the company and a $75,000 salary.

The following month, Blank assigned to Sharps several trademarks he held either personally or in companies he owned because he believed he would get a 10 percent interest in Broadsword.

Blank also released Sharps from all claims he had, and he gave up his equity ownership interest in Sharps.

"This allowed Broadsword to acquire full ownership in Sharps sometime subsequent to February 24, 2013," the ruling states.

Blank continued to design and develop inventions with a continued promise that he would get an ownership in Broadsword.

However, things changed in March 2014, when Broadsword began to demand that he report to work in Wyoming -- even though his hiring was conditioned upon living and working in Missouri, the suit claims. He argued that requiring him to commute without compensation put a strain on his finances.

Blank was informed on March 7, 2014, that he was to turn in his keys and vacate the premises.

"Plaintiff alleges that the trademarks, patents, inventions, and products he made available to Broadsword in fulfilling his duties under the Ownership Contract provided the foundation for the entire product line offered for sale by Broadsword and Sharps," the ruling states. "It continues to provide Broadsword and Sharps with virtually their entire product line."

Blank filed his lawsuit against Broadsword in September 2014. Broadsword later filed bankruptcy in February 2017, and proceedings in the case were stayed until the bankruptcy was closed in September.

After the stay was lifted, Magistrate David D. Noce granted much of Blank's motion for default judgment.

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