In 2006, Kevin J. Williams helped recover $2.5 million on behalf of a North Carolina textile company that went out of business due to the purported tortious conduct of the company’s former officers and directors and two defendant companies. The suit alleged claims for constructive fraud, breach of fiduciary duty, self-dealing, constructive trust, and unjust enrichment, arising from Defendants’ mismanagement and eventual bankrupting of the textile company.
Plaintiff alleged that the textile company was essentially bankrupted after two fraudulent transactions. First, the Board of Directors voted to approve a Management Agreement which required the textile company to pay over $100,000 per month for management services to Defendant Company A, which already controlled the textile company. Further, Defendant Company A was already providing the services.
Second, a company owned by the textile company was sold to Defendant Company B, which was created and controlled by Defendant Company A. As noted above, Defendant Company A already controlled the textile company. Then, Company B failed to pay the note issued to the textile company for the purchase. Consequently, there was no arm’s length transaction and the textile company went out of business, leaving over 1200 North Carolina employees out of work and 450 North Carolina creditors with little recourse.
If you or your business is involved in a case as a result of a breach of contract or business torts such as fraud or misrepresentation, please contact the Law Office of Kevin J. Williams, PLLC, in Winston-Salem, North Carolina at (336)793-8459 to schedule a free consultation to discuss your options. You may also e-mail Kevin using the contact form.
