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Recent Cases: The Firm wins $3.8 million summary judgment. |
From 2003 through 2007, Plaintiff and Defendant were owners and Members of Lenox Financial Mortgage, LLC. However, in September 2007, Defendant, who had a controlling interest, terminated Plaintiff -- and thereby obtained his lucrative ownership interest in the Company. Lenox’s Operating Agreement required the buy-out of a Member’s Interest upon termination. Specifically, the Agreement provided that if a Member was terminated “without Cause,” his Membership Interest would be redeemed for five times earnings ($3.8 million). However, if a Member was terminated “with Cause”, as defined in the Agreement, his Membership Interest would be redeemed for either three times earnings ($2.3 million) or one times earnings ($757,000). When Plaintiff was terminated, the Defendants accused him of embezzlement from the Company and conversion of Company property which, if true, would only entitle him to the lowest buy-out -- one times earnings or $757,000. However, through discovery, the Plaintiff was able to show that even if all of the Defendants’ allegations against him were true, his conduct would not constitute embezzlement or conversion as a matter of law. As a result, the trial court granted Plaintiff’s motion for summary judgment, holding that Plaintiff’s termination was “without Cause” -- and directing the Defendants to redeem Plaintiff’s Membership Interest for five times earnings, or $3.8 million. The case was handled by Ed Dovin and Allison Ficken. |
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