STATE OF MAINE

YORK, SS.

SUPERIOR COURT

CIVIL ACTION

DOCKET NO. 86-608

CATHERINE DUFFY PETIT, OLD

ORCHARD OCEAN PIER COMPANY,

CDP, INC., and WHITEWAY

AMUSEMENTS, INC.,

KEY BANK OF MAINE,

1. Catherine Duffy Petit ("Petit") is a citizen of Old Orchard Beach in the State of Maine.

2. Old Orchard Ocean Pier Company ("OOOP Co.") is a corporation organized under the laws of the State of Maine. Its principal office is in Old Orchard Beach, Maine. Its principal business was the ownership, rental and operation of the old Orchard Pier located at old Orchard Beach.

3. C.D.P., Inc. is a corporation organized under the laws of the State of Maine. Its principal office is in Old Orchard Beach, Maine. Its principal business was the operation of an amusement park and the ownership and management of other commercial property.

4. White Way Amusements Inc. is a corporation organized under the laws of the State of Maine. Its principal office is in Old Orchard Beach, Maine. Its principal business was the

operation of individual pieces of equipment located in an amusement park.

5. The plaintiff, C.D.P., Inc. was organized in furtherance of the purchase by the plaintiff Petit of the assets of J.W.D. Trust and the ownership, control and operation of the old Orchard Beach pier and amusement park as hereinafter described in this complaint.

6. At all times relevant hereto, the stock of OOOP Co., and White Way Amusements Inc., was owned by the plaintiff C.D.P., Inc. and the stock of C.D.P., Inc. was owned entirely by the plaintiff Petit and each of the three corporations were managed entirely by the plaintiff Petit. Becaus.e of the close similarities of the plaintiffs hereto, the claims of the plaintiff Petit in this complaint are deemed by the plaintiff to be the claims of OOOP Co., C.O.P., Inc. and White Way Amusements Inc. Reference hereinafter to the "plaintiff," "the plaintiff Petit" and to "Petit" are intended to include the plaintiffs ooop Co., C.D.P., Inc. and Whiteway kmusements, Inc. as well.

7. Key Bank of Maine ("Key Bank") is a Maine banking corporation with its principal office in Portland, County of Cumberland, State of Maine. At all times relevant hereto, a predecessor corporation to Key Bank was Key Bank of Southern Maine, Inc., a Maine banking corporation which had its principal office in Portland, County of Cumberland, State of Maine. At all times relevant hereto the predecessor corporation to Key Bank of Southern Maine, Inc. was Depositors Trust Company of Southern

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Maine ("Depositors"). Also a predecessor corporation to Key Bank was Key Bancshares of Maine, Inc-,-which was a bank holding corporation organized under the laws of the State of Maine. At all times relevant hereto the predecessor corporation to Key Bancshares of Maine, Inc., was Depositors Corporation ("Depositors Corporation"). For purposes of this Complaint the defendant Key Bank is referred to as Depositors or Depositors Corporation, as appropriate.

8. Depositors was a wholly owned subsidiary of Depositors Corporation. Similarly, Key Bank of Southern Maine, Inc., was wholly owned by Key Bancshares of Maine, Inc.

9. The plaintiff, Petit, is a member of a family which has owned and operated the amusement park and pier at old Orchard Beach since 1907.

10. Following the death of the plaintiff's father in May, 1954, the amusement park and pier were owned and operated by the Trustees of the John W. Duffy Trust ("J.W.D. Trust"). The Trustees were the plaintiff's uncle, Wilfred Duffy and her two aunts, Elsie Duffy Bride and Marion Duffy Sullivan. In 1977, following the deaths of the above-named Trustees, the plaintiffs cousins, William Bride and John Bride, became Trustees of the J.W.D. Trust.

11. In addition to owning andoperating the amusement park and pier at Old Orchard Beach, the J.W.D. Trust also owned other valuable as sets consisting in large part of marketable

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securities, rental real estate and other real property. According to the financial statements of J.W.D. Trust, these additional assets had a net worth of approximately $1,000,000 based on book values.

12. In 1976, the plaintiff learned for the first time that she was a one-fifth beneficiary of the J.W.D. Trust. Upon learning of her financial interest in the Trust, the plaintiff, who was then 29 years old, embarked upon a course of action that eventually lead her to the ownership and control of the amusement park and the pier at old Orchard Beach.

13. In December, 1977, the plaintiff, for the purpose of contesting the Will of her uncle Wilfred Duffy and for the purpose of asserting her rights as a beneficiary of the J.W.D. Trust, applied for and was given a $125,000 line of credit by Depositors. The plaintiff initially borrowed $75,000 from Depositors on her line of credit. As collateral for that loan, she granted to Depositors a security interest in her one-fifth interest in the J.W.D. Trust.

14. In connection with these transactions and other transactions referred.to in this Complaint, the plaintiff Petit dealt with Marco F. DeSalle ("DeSalle") who was President of Depositors.

15. In early 1978, the plaintiff Petit retained the Portland, Maine law firm of Bernstein, Shur, Sawyer & Nelson ("Bernstein Shur") to represent her in connection with the proposed contest of the Will of Wilfred Duffy and the proposed

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litigation against the Trustees of the J.W.D. Trust for mismanagement. Bernstein Shur assigned as her lawyer Herbert Sawyer ("Sawyer"), a principal owner and shareholder of that firm. As security for her payment to Bernstein Shur of her legal fees and expenses, for legal services rendered and to be rendered by that firm, Petit granted a second security interest in her interest in the J.W.D. Trust to Bernstein Shur, subject to the prior security interest to Depositors.

16. Thereafter, Bernstein Shur and Sawyer actively represented the plaintiff in the litigation that she brought against the Executors of Wilfred Duffy's Will and negotiations with the Trustees of the J.W.D. Trust.

17. On December 13, 1978, the Probate Court of York County, State of Maine, rendered a decision invalidating the last Will of Wilfred Duffy on the basis that it was the product of undue influence. Immediately thereafter, beginning in early January, 1979, negotiations were commenced with William J. Bride, Jr. and John W. Bride, Trustees of the -J.W.D. Trust and James H. Bride and Peter J. Bride as beneficiaries under the Will of Wilfred Duffy with respect to an overall settlement of the two controversies existing among then.

18. As a result of these negotiations, it was agreed that the plaintiff Petit would buy out the interests of the other beneficiaries of the J.W.D. Trust for the sum of approximately $1,250,000. All during the litigation among the parties and the subsequent negotiations, the plaintiff was actively represented

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by Bernstein Shur and by Sawyer. Bernstein Shur, Sawyer and DeSalle participated actively with the plaintiff in the development of her business plan and all encouraged her to go forward and acquire sole ownership and the operation of the pier and the amusement park.

19. In furtherance of her business plan to purchase the assets of the J.W.D. Trust and to own and operate the amusement park and pier herself, the plaintiff Petit developed a three fold business plan. First, it was necessary for the plaintiff to obtain adequate financing to purchase the assets of the J.W.D. Trust; second, it was necessary that she have adequate working capital in order that she be able to operate her business, purchase necessary equipment, and pay her debts in the ordinary course as they matured; and third, it was necessary that she obtain financing needed to rebuild the pier which had been destroyed by a storm during the Winter of 1978. Bernstein Shur, DeSalle and the various banks contacted in this respect were aware of Petit's business plan.

20. In order to effectuate the plaintiff Petit's plan and to provide the needed financing, Bernstein Shur and DeSalle encouraged the plaintiff in January, 1979 to apply to Depositors for financing. At that time and for some time both prior thereto and thereafter, Depositors was a client of -Bernstein Shur. In addition, Leonard Nelson ("Nelson"), an attorney and principal owner and shareholder of Bernstein Shur was a director of Depositors, a member of its loan committee, and the Corporate

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Secretary. Nelson was also at all material times a director of Depositors Corporation, the parent company of Depositors Southern, located in Augusta, Maine.

21. Acting on the advice of Bernstein Shur, the plaintiff Petit, in January, 1979 met with DeSalle and formalized her business plan. DeSalle told her that he was enthusiastic about the plan, that Depositors would participate in the amount of $450,000 in the proposed financing to purchase the assets of the J.W.D. Trust, obtain equipment and adequate working capital, and that he would organize the balance of the proposed f inanc,ing by obtaining the participation of one or more other banks.

22. On about March 8, 1979, the loan committee of the defendant Depositors approved a $400,000.00 loan to Petit toward the purchase of the assets of the J.W.D. Trust, equipment and provide for adequate working capital, but neither DeSalle nor Nelson, both of whom were present when the bank took this action (Nelson abstaining), ever notified the plaintiff of this vote.

23. In Spring of 1979, the plaintiff Petit, impatient with DeSalle's apparent lack of progress in organizing the balance of the financing, and after consulting with Sawyer, sought such additional necessary financing from other banks. Sometime during February or March, 1979, she received a commitment from SacoBiddeford Savings Bank to lend her $100,000.00 and a commitment from York Savings Bank (now Coastal Savings Bank) to lend her $225,000.

24. In late March or April, 1979, the plaintiff Petit

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contacted Robert Mitchell ("Mitchell") President of the Pepperell Trust Company of Biddeford, Maine. Mitchell was interested in the loan package. He said he would immediately contact DeSalle.

25. During the Spring of 1979, the plaintiff Petit was attempting to reach a Settlement with the Brides relative to the purchase of the assets of the J.W.D. Trust and the operation of the pier and amusement park for the summer season, 1979, since nothing had been done about leases, rides or anything else connected with the pier and amusement park.

26. On or about March 17, 1979, DeSalle, knowing of the plaintiff's concerns, told her he had a plan to obtain the remaining funds required by Petit, DeSalle did not disclose his plan'., She rejected this idea.

27. On or about April 19, 1979, DeSalle told the plaintiff Petit he wanted her to come to a meeting at his off ice at Depositors without Sawyer, her lawyer.

28. The plaintiff attended a meeting on or about April 19, 1979 at DeSalle's office at Depositors. She was told by DeSalle that the purpose of the meeting was for her to meet some "prospective investors". Present at the meeting were a number of individuals who were clients of Bernstein Shur then, or at one time or another.in the past. During this meeting the plaintiff learned that the purpose of the meeting was for her to meet "Partners" not "lenders".

29. DeSalle told the plaintiff Petit that each of the prospective "partners",, ten in number, would put up Fifty

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Thousand Dollars ($50,000) each while collectively assuming a 51% interest in the pier and amusement park. DeSalle recommended she ,,should take the deal." The plaintiff declined and told DeSalle she had no interest in taking in any "partners". DeSalle told the plaintiff that he and Nelson were members of this group of "prospective partners" and that he and Nelson had engaged in similar business dealings before. DeSalle also told Petit that their participation was not to be made public.

30. The plaintiff Petit is informed and believes and therefor avers that at all relevant times, DeSalle and Nelson were close business and social friends and partners in various business ventures.

31. On or about hay 4, 1979, Mitchell informed the plaintiff Petit that Pepperell Trust Company was willing to participate in the proposed financing for the purchase of the assets of the J.W.D. Trust and for additional financing for the acquisition of equipment and the operations of the pier and the amusement park. He informed the plaintiff that Pepperell Trust Company was also willing to act as the lead bank in connection with the financing plaintiff required for her business plan.

32. On or about May 7, 1979, having received the commitment from Pepperell Trust and relying on DeSalle's continuing promises, the plaintiff Petit signed, at Bernstein Shur's office, an agreement to purchase the assets of J.W.D. Trust by December 11 1979. In exchange for that option to purchase, which would require the financing promised by DeSalle, Petit $17,000,000.00

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of claims she had concerning the mismanagement of the J.W.D. Trust, et al.

33. Under the terms of that said agreement, the plaintiff Petit was obliged to present the Trustees of the J.W.D. Trust with an irrevocable bank letter of credit on or before October 1, 1979 and to pay for the assets of the trust in full on or before December 1, 1979; failure to do so would result in economic harm to the Plaintiff. The terms of this agreement were known to DeSalle, her banker, and Bernstein Shur, her lawyers, who had negotiated the Agreement.

.34. DeSalle assured the plaintiff Petit not to be concerned with the.default provision in the agreement as Depositors would supply the needed additional financing to provide the plaintiff with working capital and equipment capital. The plaintiff believed and relied upon the representations of DeSalle.

35. on information and belief, DeSalle and Nelson wanted the default provision inserted into the agreement so that pressure could be exerted on the plaintiff Petit in order that they could achieve their own self-serving ends.

36. On numerous occasions between May, 1979 and July, 1979, the plaintiff Petit met with DeSalle to discuss the upcoming financing, and was reassured as to DeSalle's and Depositors, commitment to lend her $400,000.00 for the purpose of obtaining the assets of the J.W.D. Trust.

37. on June 29, 1979, Mitchell sent a letter to DeSalle confirming Depositors $400,000 participation in the loan to the

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plaintiff Petit and informing him that Depositors, "commitment would finalize this loan proposal-"

38. Approximately one week later, on July 5, 1979, Mitchell wrote to the President of Bangor Savings Bank, requesting his bank participate to the extent of $100,000 in'the loan to the plaintiff Petit. On July 10, 1979, a loan consultant at Bangor Savings wrote to Mitchell advising him of Bangor's agreement to the $100,000 participation in the loan to Petit.

39. On or about July 12, 1979, without informing the plaintiff Petit, seeking her approval or having her file a loan application, Depositors authorized a $200,000 loan to Petit with $100,000 of that loan to "be paid off to (Depositors]" to satisfy plaintiffs, outstanding obligations to the Bank. Nelson, who was present at this meeting, abstained from the vote.

40. In mid-July, 1979, in an effort to cause Depositors to close the loan transaction with the plaintiff Petit, the plaintiff and Sawyer met with the defendant Nelson at Sawyer's house. At the meeting, the plaintiff and Sawyer complained to Nelson that Depositors had promised to lend to the plaintiff the sum of $400,000.00 and that for some reason or another the plaintiff had been unable to cause the bank to close the loan in accordance with its promise. Nelson agreed to talk to DeSalle and said that he would look into the matter but failed to inform the plaintiff of the March 8, 1979 vote of the loan committee approving a $400,000 loan to Petit.

41. Shortly thereafter, the plaintiff Petit received a

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telephone call from Sawyer who told her that he was at Bernstein Shur. Sawyer said that Nelson had just come into his office and told him that Depositors, contrary to its earlier promise, had made a decision to lend her no more than $200,000 rather than the $400,000.00 previously committed and that of the $200,000, half of it (i.e.: $100,000.00) would be used to pay off her existing loan of -$100,000.00.

42. The plaintiff Petit then called DeSalle who told her in substance, "Look, do the deal and then we'll get you more money later on from Depositors Trust".

43. During the ensuing weeks in July and August, 1979, DeSalle, on numerous occasions, repeated his promise of additional monies for equipment and working capital to the plaintiff individually and in the presence of Sawyer and Nelson. 44. On September 6 and 7, 1979, relying on DeSalle's and others' representations, the plaintiff Petit, with the advice and counsel of Bernstein Shur, borrowed a total of $1,350,000 from the United States Small Business Administration (the "SBA") and the banks described above. The following of these banks - York County Savings Bank, Saco Biddeford Savings Bank and Bangor Savings Bank - are referred to hereinafter as the "participating banks".

45. With this loan, Petit bought the assets of the J.W.D. Trust for $1,250,000. The remaining $100,000 was applied by Depositors against the Petit's existing loan. There was no cash left for working capital, a fact known to Bernstein Shur and to

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DeSalle. The plaintiff would not have closed the loan without the representations of additional financing.

46. In furtherance of the transaction described in Paragraph 46 above, and in furtherance of the plaintiff Petit's business plan to own and manage the pier and the amusement park, the plaintiff Petit formed the plaintiff C.D.P., Inc. for the purpose of operating the pier and amusement park and coordinating the activities of OOOP Co. and White Way Amusements Inc. At all times relevant hereto the plaintiff Petit has owned all of the stock of the plaintiff C.D.P., Inc., C.D.P., Inc. has owned all the stock of the Plaintiffs OOOP Co., Inc. and Whiteway Amusements Inc. and the plaintiff Petit has been the manager of all three corporations.

47. Shortly after September 6 and 7, 1979, the plaintiff Petit approached DeSalle for the monies needed for working capital and equipment. DeSalle informed her that he had no money to lend for that purpose and that she should "take in partners" in order to obtain additional monies.

48. Despite DeSalle and Depositors continuing to renege on their promise of additional money, Petit began to develop and operate the pier and amusement park in 1979 and thereafter. In the process, Petit developed advantageous economic relationships with the Town of Old Orchard Beach and various businesses.

49. From time to time after September, 1979 and throughout the summer of 1980, DeSalle continued to renege on his promise of additional monies and continued to tell Petit to "take in

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partners".

50. In the spring of 19'80, the plaintiff Petit demanded that Sawyer take up the matter of DeSalle's refusals with Nelson. After Sawyer discussed the matter with Nelson, Nelson also replied that the plaintiff should "take in partners".

51. In August, 1980, Bernstein and Gregory A. Tselikis ("Tselikis"), an attorney and principal owner and shareholder of Bernstein Shur, visited the plaintiff Petit at the Pier and told her in substance that Sawyer was to be relieved as her lawyer and that they would take over representing her. The plaintiff believes that they wanted to become more closely involved in her affairs and to retain her confidence in them in order to protect themselves and Bernstein Shur and to make sure she commenced no action against Bernstein Shur or Depositors.

52. Later, sometime during the early summer of 1981, Tselikis visited the plaintiff Petit. He told her in substance that in order to help her solve her problems he had found a buyer for the pier. Tselikis said the buyer was Joseph Ricci ("Ricci"), a Maine businessman and client of Bernstein Shur. 53. The plaintiff Petit talked immediately thereafter directly to Ricci about his interest in purchasing the pier. Ricci told the plaintiff in substance that he had no interest in buying the pier but Bernstein Shur told him that she wanted to sell it.

54. In the fall of 1981 Petit, continuing to suffer the effects of insufficient operating funds, initiated discussions

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with Pepperell Trust, Depositorst the SBA and the participating banks concerning the refinancing of her 1979 loan. Pepperell, the SBA and the participating banks were initially positive in their reaction to the restructuring plan.

55. Prior to and during the period of time the plaintiff was attempting to execute her business plan relative to the Amusement Park and Pier at Old Orchard Beach, on information and belief the plaintiff states that Depositors, Depositors Corporation and Bernstein Shur were involved in much grander business plans of their own. The successful completion of these plans guaranteed to management and the stockholders of the banking corporations and members of Bernstein Shur, some of whom were also stockholders of the banking corporations, substantial profits and fees.

56. The overall business plan for Depositors and Depositors Corporation was as follows:

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Haselton "Haselton") , President and Chief Executive Of f icer of Depositors Corporation, and Scott Hutchinson, Chief Executive Officer of Canal Corporation. This merger was agreed to on April 9, 1982 and became effective on or about September 1, 1983. The merged bank was known as Canal Bank & Trust Company. It subsequently changed its name to Key Bank of Southern Maine, Inc.

3. The third step was to effect an acquisition of Depositors Corporation by Key Bank, Inc. of Albany, New York which occurred by agreement dated December 14, 1982 and became effective on or about March 1, 1984. Depositors Corporation changed its name to Key Bancshares of Maine, Inc. Key Bank of Southern Maine, Inc. remained as a whollyowned subsidiary of Key Bancshares of Maine, Inc. (d) In order to complete the business plan, it was extremely important that the banks, at all times relevant, be insulated from liability due to the misfeasance or malfeasance of its officers, directors and employees.

57. The overall plan for Bernstein Shur was as follows:

favorable position for consideration to be named general counsel for the much larger banking institution resulting from the planned mergers with Canal Bank and Key Bancshares, Inc. The plaintiff Petit is informed and believes that Bernstein Shur, and particularly Nelson, Bernstein and Tselikis had knowledge of Haselton's merger plans in 1981.

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58. The defendants knew that in carrying out their plans set out above, and in bringing to fruition those business transactions, it was of great importance that Depositors maintained a public image of competence, honesty and integrity. The defendants understood and believed that any public hint of scandal, dishonesty, conflict of interest or other unlawful conduct would adversely affect their business plans.

59. In the meantime, the following occurred:

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Chapman asked the plaintiff, in substance, "What did you do with the money . . . did you give it to DeSalle?" The plaintiff Petit replied, in substance "What money . . it was all used at the closing on September 7 and 8, 1979". Chapman then showed the plaintiff the vote of the Loan Committee and the Board of Directors, referred to in paragraph 22, above, committing Depositors to a $400,000 loan to the plaintiff. This was the first time the plaintiff was ever aware of such a vote. The plaintiff told Chapman that no one had ever told her of this vote and that she had only received $200,000 of which over $100,000 was .applied to a preexisting loan at the bank. Chapman said he was "shocked" to learn that she had not received the full $400,000 and that, in light of this and her other allegations, he would investigate this matter and get back to her "as soon as possible".

(b) In October, 1981, DeSalle was relieved of his responsibilities as president of Depositors and his employment was terminated on October 5, 1981.

(c) Shortly thereafter, the plaintiff Petit met with Chapman at his office at Depositor's Corporation in Augusta, Maine. The plaintiff informed Chapman that, now knowing of the $400,000 vote and the subsequent "partnership" pressure of DeSalle and Nelson, she believed that they had attempted to steal her business. She demanded to know from Chapman what the bank was going to do about it. He said he would

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investigate and get back to her.

(d) At or about that time Bernard K. Holdsworth Chairman of the Board of Depositors Trust Company of Southern Maine (--Holdsworth"), requested that the FBI and the Attorney General conduct an investigation concerning DeSalle's relationship with a business client of Depositors, New Look, Inc., and its president, Gerald Sneider ("Sneider"). (e) on November 16, 1981, Owen R. Colomb ("Colomb") was designated by the Attorney General for the State of Maine to conduct an investigation of a transaction between Depositors and Sneidet.

(f)' Colomb and Agent Gary E.W. Barnes ("Barnes"), of the F.B.I., in a meeting on or about November 25, 1981, agreed that a joint investigation of the wrongdoings of Depositors and Depositors Corp. would be conducted by the Attorney General for the State of Maine and the FBI. This joint investigation was known to Depositors and Depositors Corp. (g) As a result of this combined investigation, Depositors knew or reasonably should have known that information given to the Attorney General's office would be shared with the FBI.

(h) In late November or early December, 1981, after talking with Chapman for the second time, Petit informed Sawyer that she was going to complain to the Attorney General about DeSalle and Nelson relative to their attempt to steal her business. Having left that meeting, Sawyer called Petit

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60. In November and December 1981 and subsequently, the defendants Depositors and Depositors Corporation did the following relative to the Sneider and Petit allegations:

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61. Haselton's false accusation, falsely attributed to the plaintiff Petit, came to the attention of Pepperell Trust Company and Mitchell in December, 1981 or early 1982. Thereafter, as a result of said accusation, and their reliance on the misstatement that plaintiff Petit was its source, Pepperell Trust and Mitchell became hostile to the plaintiff Petit. This false accusation by Haselton, which he falsely attributed to plaintiff Petit,

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irreparably damaged the plaintiff's economic relationship with her lead bank, Pepperell Trust Co. and its President Robert Mitchell.

62. On or about January 8, 1982 representatives of Pepperell, Depositors and the.participating banks with Petit met to further discuss the refinancing of the 1979 loan. In that meeting, Pepperell, represented by Mitchell, was cool and aloof and refused to speak with Petit. Mitchell left the meeting while it was still in progress.

63. During early 1982 Depositors brought increasing pressure to bear on Pepperell Trust and the other participating banks not to refinance Petit's loan, but rather to foreclose on the pier and amusement.park property.

64. On February 3, 1982 Pepperell informed Petit by formal letter that her request for refinancing would not be approved and that foreclosure actions would begin.

65. Pepperell Trust's shift from supporting the refinancing of Petit's loan to opposing it resulted from the false allegation concerning the kickback paid to Mitchell, its President, and from the pressure applied to it by Depositors.

66. In September, 1982 Pepperell Trust Company filed foreclosure proceedings against CDP, Inc. for the loans involved in the September, 1979 closing. This action forced the plaintiff to file for bankruptcy and led to her losing ownership of the amusement park and the pier.

67. The plaintiff Petit hired Richard E. Poulos ("Poulos")

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as counsel to represent CDP, Inc. relative to the announced foreclosure action by Pepperell Trust Company against CDP, Inc. At a meeting at Poulos' office to discuss the matter, Sawyer told Poulos that DeSalle had told him in the Spring of 1979 that both he, DeSalle, and Nelson, Sawyer's law partner, were members of the partners group proposed to Petit on April 19, 1979, although their participation was not to be made public. Although Poulos was to represent CDP, Inc., Sawyer was to remain attorney for Petit, OOOP Co., and Whiteway Amusements.

68. On March 1, 1982, a letter was sent to Jack A. Porter, a customer of Depositors and friend of DeSalle from Porter,s attorney, Ralph A. Dyer, concerning negotiations between Porter and De positors on the Sneider matter, which evidenced Depositor's continuing desire to insulate itself from any scandal or liability arising from the Petit allegations. A copy of that letter is attached hereto and marked as Exhibit "CII.

69. On June 29, 1982, Haselton wrote a memo to Joel

Stevens, the new President of Depositors of Southern Maine, relative to a "list of non-accruing loans." The memo was predicated upon an anticipated claim by the bank to its bonding company for losses sustained by the bank. In the memo Haselton stated:

"I'd like you to'do everything possible to be sure all of these 'characters' are tied into our'claim as 'tainted, loan situations if you cannot actually put them in as direct claims of dishonesty and/or unfaithful performance of duty, etc. I think it.is also important to get Hershom Lumber and the Old Orchard Pier (Kathy Petit) loans mentioned in our claim as having a healthy list of 'stench, and conflicts of interests at the very least. (You probably have others I've not thought of that should

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also be included.),,

A copy of this memo is attached hereto and marked Exhibit "D".

70. As set forth in paragraphs 1 through 69 above, the plaintiff Petit alleges that Depositors, Depositors Corp., DeS'alle, Nelson and Bernstein Shur engaged in a course of conduct toward Petit to w rongfully strip her of her business and property for their own benefit; that when this scheme came to light, Depositors Corp. and Depositors, because they were involved in a potentially financially rewarding merger, ratified the conduct of its agents and employees. It further engaged in a course of action calculated to conceal any wrongdoing by Depositors and any of its officers and to make it less likely that Petit could effectively pursue her claims. To reach that goal, and despite the enormous damage that would be caused to plaintiff, Depositors and Depositors Corp., through Haselton and one or more other agents or employees, engaged in the intentional interference set forth below.

71. Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs 1-70, supra, as though fully set forth herein.

72. In November, 1981 law enforcement officials of the State of Maine Attorney General's office and the Federal Bureau

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of Investigation began a joint investigation of Depositors with regard to possible violations of state and federal laws.

73. During November, 1981 and thereafter, Wallace Haselton was the Chief Executive Officer of Depositors Corporation. With regard to all allegations as to Haselton's conduct made herein, Haselton was acting within the scope of his authority of Depositors and Depositors Corporation, and was acting to further the financial interests of Depositors and Depositors Corporation.

74. In November, 1981 and thereafter Robert Mitchell was President of Pepperell Trust Company.

75.. In November, 1981 Petit had advantageous economic relationships with Pepperell Trust Company, the participating banks, the SBA, the Town of Old Orchard Beach, and the businesses dealing with Petit's pier and amusement park businesses. Further, Petit had the prospect of future advantageous economic relationships with each of these entities.

76. On or about December 2, 1981, Haselton, acting on behalf of Depositors and Depositors Corporation, stated to an agent of the Maine Attorney General's office, in connection with its and the FBI's investigation, that Plaintiff Catherine Petit had alleged that Mitchell took an illegal fee or "kickback" in connection with Pepperell's 1979 loan to C.D.P., Inc. Haselton knew that an investigation would be launched against Petit and Mitchell.

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77. Haselton knew and intended that the false statement would be published to other law enforcement officials, Pepperell Trust, the SBA and the participating banks.

78. The statements by Haselton were patently false: no "kickback" had in fact been paid to Mitchell, nor had Petit ever alleged that she had given Mitchell such a kickback in conjunction with the 1979 loan.

79. The statements by Haselton involved a fact material to the existing and prospective relationship between Petit and Pepperell Trust, the SBA, the participating banks and other businesses.

80. At the time Haselton made his statement to the Attorney Generalls office, and at each time he repeated it to other law enforcement officials, Haselton either knew the statement was false or he acted in reckless disregard of whether it was true or false.

81. Haselton made the false statements for the purpose of improperly and maliciously inducing the various law enforcement officials to begin an investigation of Pepperell Trust, Mitchell and Petit, in order to cover up the allegations related to DeSalle and others. The Attorney Generalls office and the FBI, acting in justifiable reliance upon Haselton's statements as true, began such an investigation of the alleged kickbacks. Both the investigation and the allegations falsely attributed to Petit were subsequently made known to Pepperell Trust.

82. Haselton also made the false statement to the agents of

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the Attorney General's office and to other law enforcement officials for the purpose of inducing Pepperell Trust to act in reliance upon the statement as true - specifically, to lead Pepperell Trust to believe that it was Petit or her attorney who was alleging Mitchell's involvement in illegal activities. Pepperell Trust was thereby induced to act adversely to Petit, thus crippling Petit's business and diverting her and the law enforcement agencies' attention away from Depositors and Depositors Corporation.

83. In early 1982 Haselton's false statement, falsely attributed to plaintiff Petit, became known to Pepperell Trust Company, including but not limited to Robert Mitchell.

84. Mitchell justifiably relied upon that portion of Haselton's statement as true which accused Petit of being the source of the kickback allegation.

85. Other officers and agents of Pepperell Trust justifiably relied upon Haselton's statement as true.

86. Petit did not become aware of Haselton's actions until May, 1984, upon review of a transcript of a deposition being taken in an unrelated lawsuit.

87. Haselton made the false statement described in paragraph 76, supra, to the various law enforcement officials for the purpose of intimidating Pepperell Trust, Mitchell and the participating banks: by creating the specter of a state and federal investigation of Mitchell, Pepperell Trust and Petit,

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with its attendant potential for damage to the banks,

reputations, Haselton knew and intended that Petit's existing and prospective economic relationships with Pepperell Trust, the SBA, the participating banks, and other businesses would be adversely affected, and. that Petit would be severely handicapped in asserting any claims against Depositors, all to the benefit of Depositors and Depositors Corporation.

88. Depositors and Depositors Corp., as part of their plan to clear Petit's 1979 loan from their books cover up their own wrongdoing, and thereby facilitate its own negotiations with Key Bank, engaged in economic coercion constituting intimidation by wrongfully pressuring Pepperell Trust to pursue foreclosure upon Petit's 1979 loan rather than allowing Pepperell Trust and the other participating banks to refinance the loan.

89. Haselton, by means of his false statements, wrongfully caused the extinguishment of Petit's existing contractual relationships with Pepperell Trust, the SBA and the participating banks, which, but for his interference, would have otherwise continued.

90 . Haselton, by means of his false statements, wrongfully interfered with Petits' expectancy of future contractual and other economic relationships with Pepperell Trust, the SBA, the participating banks, the Town of Old Orchard Beach and other businesses.

91. Haselton's actions were intentional and motivated by

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actual ill-will constituting malice toward plaintiff, or were so outrageous that malice should be implied.

92. Haselton's statements and actions constitute intentional interference with Petit's existing and prospective advantageous economic relationships, by means of both fraud and intimidation.

93. Depositors, by means of its pressuring Pepperell Trust and the participating banks not to refinance Petit's 1979 loan, and by pressuring Pepperell Trust to initiate foreclosure proceedings against Petit, wrongfully caused the e xtinguishment of Petit's existing contractual relationships with Pepperell Trust, the SBA and the participating banks which, but for Depositors' interference, would have otherwise continued.

9 4 . Depositors, by means of its actions, wrongfully interfered with Petit's expectancy of future contractual and other economic relationships with Pepperell Trust, the SBA, the participating banks, the Town of Old Orchard Beach and other businesses.

95. Depositors' actions were intentional and motivated by actual ill-will constituting malice toward plaintiff, or were so outrageous that malice should be implied.

96. Depositors, actions constitute intentional interference with Petit's existing and prospective advantageous economic relationships, by means of economic intimidation.

97. As a result of each and every instance of Depositors, intentional interference with Petit's existing and prospective

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advantageous economic relationships, accomplished through both fraud and intimidation, Petit has suffered substantial economic damage including but not limited to lost profits, the loss of the old Orchard Beach pier and other real commercial property, the loss of other business opportunities, and the loss of business goodwill in the business and banking communities.

WHEREFORE, Plaintiffs respectfully request that this Honorable Court enter judgment against Defendant Key -Bank of Maine, jointly and severally, and award Plaintiffs the following: compensatory damages, punitive damages, reasonable attorney's fees, costs and interest, and such other relief as this Court deems just and equitable.

CARON & SULLIVAN

25 Pool Street

Biddeford, Maine 04005

(207)284-5535

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