Donovan loses appeal in business lawsuit

Jan. 27—HAMILTON — The state Appeals Court has sided with a Vermont woman who lost $1.5 million after investing in a business being run by John Donovan Sr. — who, a judge found, used that money and other investors' funds to continue his wealthy lifestyle after being cut off from a family trust.

Donovan Sr., of Hamilton, a former MIT professor and self-styled "business guru," became involved in a now-defunct startup called "Send It Later," after the Vermont couple who came up with the idea was introduced to him by an attorney they had consulted.

The plan was to build a website where people could set up an account that would continue sending cards, flowers and gifts to loved ones after a person's death by partnering with florists, greeting card manufacturers and retailers.

Jennifer Brining decided to invest in the business.

In 2020, a Suffolk Superior Court judge concluded that instead of going into building the business, the bulk of funds invested by Brining and others went instead to personal expenses for Donovan — including $28,000 to the Hair Club for Men and his membership fee at Myopia.

The judge awarded Brining and other shareholders nearly $3 million in damages, interest and attorneys fees.

The judge relied on evidence of 60 transactions totaling $2 million that went to Donovan or entities he or his wife and a close friend controlled.

Donovan and his attorney, Robert Strasnick, challenged the judge's findings and the award, contending that the trial judge had failed to adequately consider evidence of "offsets" claimed by Donovan.

The trial judge also specifically excluded Donovan, his wife and his longtime friend — who had all obtained shares in the business — from collecting damages as shareholders, and based the amounts owed to each of the original investors, including Brining, on the amount of funds they had put into the business instead of on the number of shares they held.

They also argued that the judge failed to consider other creditors who were owed money by Send It Later.

The Appeals Court rejected those claims in a ruling released Wednesday.

"Here, prior to any witnesses being called, the judge found that Brining met her initial burden of identifying self-dealing transactions made by Donovan and thus concluded that ... the burden shifted to Donovan to justify those transactions," the court said in its ruling.

The trial judge "expressly found" that Donovan hadn't proven that the offsets he claimed were reasonably related to the business, the Appeals Court noted.

Strasnick called the ruling "disappointing." He said no decision has been made as to further steps, such as an appeal.

Brining's attorney was pleased.

"The mills of the gods grind slowly, but they grind exceedingly fine," Brining's attorney, Michael Gilleran, said, quoting an old saying, on Wednesday. "My client, Jennifer Brining, fought for over five years, but she got everything she asked for and deserved."

The Appeals Court decision doesn't guarantee that Brining and the other investors will receive the money, however.

A separate pending case expected to be heard by the Appeals Court sometime later this year involves efforts to collect on the judgment by accessing a trust fund that was set up as part of a settlement with Donovan's surviving children in long-running litigation over other matters. The settlement restricts Donovan's access to funds.

Donovan is also currently awaiting trial in an alleged criminal scheme to fraudulently obtain funds from his late son's estate by filing forged deed transfers, a will codicil and other documents at the South Essex Registry of Deeds.

The trial in that case was delayed last November just as jury selection was set to begin, after the defense added new witnesses, forcing prosecutors to bring in additional witnesses of their own.

Donovan was also convicted previously of filing a false police report when he was found by a judge to have staged his own shooting — which left a superficial wound to his belly — and then claiming it had been done by Russian hitmen supposedly sent by his other son in 2006.

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis