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Canton, MA - No Bombshells In Romney Staples Testimony: Court Papers

Published on: October 25, 2012 11:01 PM
By: Reuters
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Canton, MA - Republican presidential challenger Mitt Romney’s testimony from a 1991 court hearing related to the founder of Staples Inc appeared to contain little likely to damage the candidate’s chances in the November 6 general election.

The 192-page filing, released with a Massachusetts court’s approval on Thursday, shows that the retailer, prior to its initial public offering, issued a new class of shares to help fund Staples founder Thomas Stemberg’s divorce from Maureen Sullivan Stemberg.

The Norfolk Probate & Family Court in Canton, Massachusetts, south of Boston, on Thursday approved the release of hundreds of pages of testimony Romney delivered at a hearing on Thomas Stemberg’s divorce from Sullivan Stemberg, at the Boston Globe newspaper’s request.

The office-supplies retailer - in which Bain Capital, a private equity fund that Romney worked for before entering politics, was an early investor - had privately sold a new class of shares to facilitate the divorce, former Massachusetts Gov. Romney said, according to the transcripts.

“It was something which was done in my opinion, it was initiated as a favor. Tom needed to have a settlement with his wife so that was the genesis of it,” Romney said, according to the transcripts.


The “D” class of shares at issue could be converted to common stock, unlike earlier shares sold in three prior rounds of fundraising, which held greater voting rights, Romney said, according to the transcript.

Thomas Steinberg spoke on Romney’s behalf at the Republican National Convention in August.

Sullivan Stemberg’s attorney, Gloria Allred, had sought both to have the transcripts released and to free her client from a gag order that prevents both Sullivan Stemberg and her former husband from discussing terms of their divorce.

Norfolk Probate & Family Court Assistant Judicial Case Manager Jennifer Ulwick agreed to the release of the documents but declined to lift the gag order.

Allred warned that without Sullivan Stemberg’s comments the testimony may mean little to the general public.

“Out of context, it is essentially meaningless to the public, and she can put it in context,” Allred said, referring to her client.

Romney provided testimony in 1991 on behalf of Stemberg, who was battling a post-divorce lawsuit.

Sullivan Stemberg has disputed Romney’s description of the value of the company, according to a filmmaker who interviewed her.

A spokesman for Thomas Stemberg said he was pleased that the judge had upheld the order preventing him or his ex-wife from discussing the case.

“We are delighted that the court has upheld the confidentiality order in this case, which has nothing to do with Governor Romney,” said George Regan, a spokesman for Stemberg. “It is and always has been a private family matter that should not be subject to public speculation.”


Romney attorney Robert Jones said the candidate had no objection to the testimony being made public.

“These tabloid charges being shopped by Gloria Allred, one of President Obama’s most prominent supporters, are absolutely false,” said Jones, of the Boston law firm Ropes & Gray. “There is no new information here.”

Allred, who has donated to Obama’s re-election campaign, denied the moves were politically motivated.

Staples also raised no objections to the release.

At issue is how Romney described the value of Staples. An independent filmmaker who interviewed Sullivan Stemberg for an uncompleted movie project told Reuters on Wednesday that she felt he inaccurately described the value of the company.

Staples, which went public in 1989, was worth $264.4 million on June 26, 1991, the first day of Romney’s testimony.

Three months later, the stock price had climbed 26 percent to push its market value to $334.28 million on September 26, 1991. A year after Romney’s testimony, Staples was worth $507.1 million.

Romney in testimony described Thomas Steinberg as a typical entrepreneur, placing high odds on the success of his business, according to the testimony.

“He spoke about the future as if it were here today and minimized the, you know, in raising money from board members individually minimized the, in his own mind, the risks and maximized the probability of a high degree of success,” Romney said, according to the transcript.

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