“De Facto” Officers May Be Liable for Claims Under the Wage Act

On June 10, 2005, in the case of O’Leary v. Henn , the Massachusetts Superior Court, ruling on a motion to dismiss, held that a person acting as a de facto president and treasurer of a corporation could be held liable for unpaid wages under the Massachusetts Wage Act.

The plaintiff worked for a corporation that ultimately filed for bankruptcy. He sued the President of the corporation and Karl Eller, an investor in the corporation, for unpaid back wages. Eller had invested nearly $6,000,000 in equity and debt securities of the corporation. Eller owned 39.9% of the corporation’s stock and was owed approximately $2.2MM at the time of the corporation’s bankruptcy filing.