Case No.583

Advisory & Financial Services

LITIGATOR(S):

Etan Mark

Michelle Genet Bernstein

MM&H was retained to represent the Guardian of an individual with over $80 million worth of assets, primarily held in the form of stock certificates of ADP and its spinoff companies. The stock is held by a Liechtenstein holding company, which later was managed by a Swiss entity. The manager and sole director of the companies, an Italian resident, had been skimming and pilfering millions from the company for over a decade. The Guardian, formerly represented by another Florida law firm, sued the director in the Southern District of New York. Over the course of the litigation, the Guardian learned that JP Morgan, which held one of the company’s accounts, had escheated over $40 million worth of stock and cash to the State of Delaware.

The New York action settled in February 2021. Following settlement, the Guardian learned that the director likely breached material representations in the Settlement Agreement, and, immediately prior to his agreed resignation as director of the company, created millions of dollars’ worth of Swiss tax liabilities against the company. The Guardian replaced former litigation counsel with MM&H in April 2021. MM&H has been working in tandem with counsel in Delaware to recover the escheated assets, and with counsel in Switzerland to mitigate the onerous tax liabilities assessed as a result of the former director’s bad acts on his way out.

MM&H is investigating potential claims for fraud, breach of fiduciary duty, and other claims which it will file in New York federal court. MM&H is also pursuing action against JP Morgan for its improper and negligent escheatment of over $40 million worth of assets to the State of Delaware, which took months and tens of thousands of dollars of legal fees to recover.

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