We filed suit on behalf of our client for his share of the proceeds from the sale of a retail business in northern Arizona. Our client had invested $140,000 in the business. It was later sold, without our client’s knowledge or consent, for the price of $7,000,000. We calculated our client’s share of the sale proceeds to be at least $500,000.
Ten years earlier, a locally well-known northern Arizona businessman (“Marvin”) had solicited our client to invest in a startup business. The partners planned to build and operate a retail store and museum on land owned by Marvin. One business purpose was to develop informative exhibits and educate guests of the museum about archeology.
Our client, a prominent artist and collector of pre-historic artifacts, was to contribute $100,000 and lend his pre-historic collection and museum ruin artifacts. Marvin promised to contribute $100,000 and the 7,040-acre parcel of land on which the store and museum were to be built.
Shortly after his initial investment, our client invested another $40,000 to meet the need for additional capital, bringing his total cash investment to $140,000. The store and museum were built, and over time, the business grew and prospered. The partners hired a manager to run the store and museum.
Unbeknownst to our client, the land that Marvin had promised to contribute to the business was actually transferred to his family limited partnership. Nine years after the business started, Marvin died. Shortly after Marvin’s death, the family limited partnership sold the land, buildings, and inventory to a group of third-party investors in an all-cash transaction.
When our client discovered the sale, he sued the family limited partnership for fraud and conversion to recover his share of the $7,000,000 sale proceeds. The parties agreed to participate in mediation, and the case was settled. The terms of the settlement cannot be disclosed by reason of a confidentiality agreement.
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 Law Group, P.C. All rights reserved.