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Suits allege CMI Network 'absconded' with clients' money(St. Petersburg Times (FL) (KRT) Via Thomson Dialog NewsEdge) Nov. 4--Just days before the start of a 300-person convention in the Bahamas this February, sponsor Honeywell got some bad news. Its event planner -- Palm Harbor-based CMI Network -- hadn't booked any hotel rooms. A red-faced Honeywell had to cancel the convention, as well as a subsequent one in Boca Raton. Worse, CMI wouldn't return its $760,000 deposit. Peter Berlowe, CMI's Miami lawyer, said company officials admit owing the money and want to repay it. He blamed the foul-up on two things: a nervous lender's sudden revocation of CMI's line of credit, and Honeywell's meddling in a payment plan between CMI and the Bahamas hotel. But in a federal lawsuit filed late last month in Tampa, the corporate giant alleged that CEO H.T. Grinnon and CFO Jonathan Grinnon, his son, stole and "absconded" with the missing funds. Honeywell filed a similar suit against CMI in April and won a default judgment. As of Friday, the Grinnons hadn't responded to the latest suit. Berlowe, however, called it "a real shame and a travesty." "At worst, they had trouble with a business," he said. "These are good people." CMI, a travel and event planning business formed in 2003 by the elder Grinnon and several other shareholders, enjoyed a rapid ascent. Its client list included big names like Honeywell, Verizon and CBS Radio. In 2005, it teamed up with a Clearwater developer to make, and later withdraw, a $45-million bid on the Westin Innisbrook Golf resort. At its height, it reportedly had more than 80 employees nationwide. "This company -- is really growing by great leaps and bounds, and you folks out there that are receiving this message, it's because of you," CEO Grinnon said in a 2004 pep talk to CMI's sales staff. Former colleagues almost universally describe the founder as charismatic and a consummate salesman. "H.T. was a very nice guy, had a lot of energy, a lot of good ideas," said David Hooks, a Clearwater marketing specialist who represented CMI's team in the Westin bid. By 2006, however, CMI's rapid growth had begun to catch up with it, and cash flow ebbed. An Orlando hotel was stiffed for $400,000, Honeywell said in its suit. CBS Radio sued over a $500,000 debt. Several smaller creditors also filed suit, and some contractors complained. In late spring, CMI laid off its staff. Attempts to reach the Grinnons for comment were unsuccessful. Kevin Kaplan, a Miami lawyer representing Honeywell, declined to answer questions, including whether the company plans to seek criminal charges against the father-son team. He said Honeywell does not comment on pending litigation. Berlowe, the CMI lawyer, sounded an optimistic note. "They are not happy that Honeywell is unhappy," he said. "They're trying to fix it, and if they can bring in venture capital, Honeywell will get paid back." To see more of the St. Petersburg Times -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.sptimes.com. Copyright (c) 2006, St. Petersburg Times, Fla. Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |