Walsworth Obtains $8 Million Binding Arbitration Award in a Breach of Contract Case
Walsworth attorneys Anna Greenstin Kudla and John Kaniewski obtained a binding arbitration award for both general and punitive damages in an amount of no less than $8,075,000, plus over $250,000 in attorney fees and costs, arising from a complicated breach of contract and operating agreement claim.
This arbitration involved a large start-up aircraft manufacturing company. Claimants alleged two officers siphoned money from a limited liability company (LLC), without any regard to their fiduciary duty or standard of care responsibilities. After finding out about the mismanagement and utter disregard for proper business procedures, Claimants entered into a buyout agreement. Despite entering into a valid contract to sell their ownership interest, the company’s Chief Executive Officer and Chief Financial Officer removed Claimants’ equity interest without payment. The arbitrator found the conduct of the officers to be improper, ruling that under California statute and common law, officers of an LLC are accountable to its members.
If not for the hard work of talented and aggressive trial attorneys, claimants could have lost over $4 million in investment capital. This successful arbitration was the result of two years of discovery and several weeks in private binding arbitration.