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Noteworthy CasesHolman et. al. v. Ocwen Financial Corp. and William Erbey
Our firm, along with several other lawyers from other firms, represented three California businessmen who sold their mortgage brokerage business to Ocwen Financial Corp., a N.Y. stock exchange company, in exchange for cash and stock in a newly formed entity. Under the terms of the sale, our clients were to receive a 20% interest in the new company. From the outset, however, our clients were shunned by the controlling majority, were kept in the dark about what was going on and were called upon to meet huge capital calls or face dilution. When the capital calls were not met, our clients' 20% interest was diluted down to less than 1%. Despite the infusion of fresh capital, the new company eventually went out of business and the value of our clients' interest in the new company was essentially worthless. The controlling contract required that this dispute be arbitrated rather than filed in court. As a result, we filed a demand for arbitration with the American Arbitration Association. After a two week arbitration proceeding where many witnesses were called to testify, a majority of the arbitrators ruled in favor of our clients. Specifically finding that the defendants breached their fiduciary duties and defrauded our clients out of their interest in the company, the panel awarded $10,352,244. |
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