Business Torts and Fraud Litigation Cases

The following are representative examples of the business tort and fraud litigation cases handled by our lawyers:

Fraud and Embezzlement by a Company CEO

Michael Mihm recently represented a private equity fund who sued the former CEO of one of its companies, along with the CEO’s spouse and brother, for fraud, breach of fiduciary duty, and embezzlement. After a 10-day trial, during which the defendants filed bankruptcy, a state court jury in Fort Worth, Texas, found the defendants liable for fraud, breach of fiduciary duty, conversion and civil conspiracy, and awarded damages of $632,000 to our client; the trial court later awarded attorney fees and costs, and other relief. International Beauty Products, LLC vs. Garth Beveridge, Dinah Beveridge and Craig Beveridge, District Court for Tarrant County Texas, 48th Judicial District.

Later, after a second bench trial, the U.S. Bankruptcy Court denied the defendants’ discharge in bankruptcy and entered a non-dischargeable judgment of $554,000 against the former CEO, plus substantial other relief. International Beauty Products, LLC vs. Garth Beveridge, Dinah Beveridge, and Carey Ebert, Trustee, Adv. No. 08-04096, United States Bankruptcy Court for the North District of Texas.

Minority Owner Squeeze Out

Elizabeth Hyatt and Michael Mihm represented our clients, investors in a start-up business that had grown to more than $1 billion in annual sales in less than 5 years, in a lawsuit alleging breach of contract, breach of fiduciary duty, securities fraud and other claims. The defendants, the company and its senior management, had squeezed out our clients from the business. We settled the case for $3,450,000 shortly before trial.

Interference with Corporate Business Opportunity and Legal Malpractice

Michael Mihm and Elizabeth Smith recently represented a start-up energy conservation company and its owners in a lawsuit brought by another business which claimed that our clients had misappropriated its business opportunities. Mr. Mihm and Ms. Smith also pursed a third-party legal malpractice case against the lawyer who had advised our clients about the business opportunity. The case settled for a confidential amount before trial. Advanced Lighting and Energy Solutions, Inc., vs. Stewart, et al, Case No. 2007CV2385, District Court, County of Jefferson, Colorado.

Equity-Stripping and Legal Malpractice

We represented the sellers of a successful small business who were victims of an equity stripping scheme by a serial fraud. We made a claim against our clients former lawyers, who were specifically asked to perform a due diligence background investigation of the defrauding buyer. The lawyers neglected to perform the background investigation. The legal malpractice portion of the case settled for a confidential amount before we filed suit.

Business Fraud, Minority Owner Freeze-Out.

We represented the plaintiff, Gateway USA, Inc., which merged its profitable parking valet business with another valet business owned and operated by the defendants. Our client alleged that the defendants concealed financial and other information both before and after the merger, froze our client out of the management of the new company, and diverted the company's profits to themselves and their family. Following a four-day trial, the jury found that defendants ESC, LLC, William A. Eirish Sr., and William A. Eirish Jr. had committed fraud and engaged in a civil conspiracy to commit fraud against the plaintiff. The jury awarded the plaintiff over $1.5 million in damages, including $340,000 in punitive damages assessed against each of defendants for their fraudulent and malicious conduct. Gateway USA, Inc. v. ESC, LLC, et al., District Court, City and County of Denver, Colorado.

Fraud in the Sale of Business.

We represented the purchaser of a retail business defrauded by the sellers. The jury found that the sellers misrepresented the business's inventory, sales, and profitability. The jury awarded $680,000 in actual and punitive damages against the defendants. K-Boys, Inc. v. Discovery Valley Home Development LLC, et al., Case No. 2006CV6982, District Court, City and County of Denver, Colorado.

Breach of Fiduciary Duty and Self-Dealing by Manager

Michael Mihm and Elizabeth Hyatt represented a real estate development company in a breach of fiduciary lawsuit against the company’s manager and obtained a judgment of $983,000. The arbitrator awarded damages of $509,000 and costs of $104,000 against the manager, plus other remedies. The trial court later confirmed the arbitration awarded and entered judgment against the manager for an additional $179,000 in prejudgment interest and $191,000 in post-judgment interest. Florado Partners, LLC v. Ronald Gollehon, et al., Case No. 2005CV137, District Court, City and County of Denver, Colorado.

Consumer Fraud and Unfair Trade Practices.

Michael Mihm represented clients in fraud and unfair trade practices lawsuit against a company that arranges independent medical examinations for the insurance industry. Relying on the "whistle blower" testimony of the company's former employees, we established that the defendant company had fabricated a medical expert witness opinion in a related personal injury lawsuit, to the detriment of our clients, and had routinely altered medical expert witness reports in other cases. The case settled for a confidential amount shortly before trial. Affa v. Med Ops Medical Management, Inc., et al., Case No. 2004CV2723, District Court, City and County of Denver, Colorado.

Breach of Fiduciary Duty - Oppression of Minority Shareholders.

Michael Mihm and Elizabeth Hyatt represented one of Colorado's leading business law firms in a lawsuit filed by a minority member of a technology company alleging that he was squeezed out of the company, and that the defendant law firm aided and abetted the majority owners' breach of fiduciary duty. The jury found in favor of our client after a 9-day jury trial. District Court, City and County of Denver, Colorado

Embezzlement - Negligence.

Michael Mihm represented a Colorado employment agency that placed a Chief Financial Officer in a construction company. The employee later embezzled from the company, was convicted and sent to prison. The plaintiffs accused the defendant of not conducting a sufficiently thorough background investigation. After a 6-day trial, the jury found in favor of Mr. Mihm's client. District Court, El Paso County, Colorado.

Contact us now for a confidential consultation about your business tort or fraud claim and how we can help you.