Telecommunications

MM&H represented Matt Lopatin in the defense of claims for breach of fiduciary duty and conversion related to the purported improper use of corporate funds. Mr. Migdal crafted a two-prong defense to liability: (1) Mr. Lopatin as 50% owner of a closely held telecommunications company was vested with the authority to make the distribution pursuant to the procedures and protocols of the company, and (2) the distribution was proper because it was in an amount equal to what the other owner was improperly taking in personal benefits. To minimize our client’s fees and cost exposure, MM&H filed a claim for dissolution and sought the appointment of a custodian. The purpose of this was to have the company pay for the investigation of the other owner’s misconduct, to put an end to the other owner taking in excess of $100,000 per year in funds from the company and to distribute cash being held by the corporation. Once the custodian was engaged, Mr. Migdal quickly convinced the Custodian to put an end to the other owner receiving money or benefits from the company and to hire a forensic accountant to investigate the other owner. The forensic accountant found that the other owner used the company coffers for his own personal expenses. Discovery also established that our client had the authority to make distributions. During discovery it has also been uncovered that Lopatin’s former business partner breached his fiduciary duty in making in excess of $2,000,000 in payments to a law firm and by transferring assets to a shell corporation to avoid personal tax implications and to justify the use of company funds for salary and expenses. Based on these facts, Lopatin brought significant counterclaims. The matter has been resolved through confidential settlement.

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