We represented one of two members of a real estate-development company in a suit against the company’s manager for breach of contract, breach of fiduciary duty, and fraud. The company was engaged in the business of buying houses, fixing them up, and then selling them.
We joined in the suit numerous other business entities controlled by the manager, because it appeared that the manager had fraudulently transferred the company’s assets to those entities. The suit sought money damages against the manager and the other entities that he controlled.
The claims against the manager were subject to mandatory binding arbitration. After a three-day arbitration hearing, the arbitrator found that: 1) the manager breached the company’s operating agreement by, among other things, wrongfully disposing of the company’s assets; 2) he breached his fiduciary duty to our client; and 3) he defrauded our client.
The arbitrator awarded damages in the amount of $419,980, to which our client was entitled to half, and attorney fees and costs in the amount of $81,963.
The claims against the other parties in the suit were settled before trial, based in part on their agreement to forfeit any interest in a $35,000 cash bond previously posted by our client, and to convey title to four commercial lots to our client having a fair value of approximately $150,000.
The information contained in this article should not be construed as legal advice or legal opinion on any matter discussed. The contents are intended for general information purposes only. Always consult a qualified attorney for legal advice on a specific matter.
© 2018 Loose, Brown & Hobkirk, P.C. All rights reserved.