photo - yogurt spoliationEvidence is the life blood of a lawsuit. If you think you may have a legal claim against a party it’s important you not alter any evidence and maintain its integrity. If you think you may be sued, or have already been sued, you may be tempted to alter or destroy damaging evidence. That’s not a good idea because it may open you up to possible sanctions by a judge.

This issue came up in purported false advertising class action lawsuits filed last year against Whole Foods Supermarkets, according to the Philadelphia Inquirer. They are based on a Consumer Reports story concerning store brand Greek yogurt. Six samples were found to have on average 11.4 grams of sugar while the labels stated that they only had two grams of sugar.

Attorneys for the store stated yogurt samples had been retained for testing. Plaintiffs’ attorneys weren’t so sure. They filed a motion in court claiming all of the yogurt in question had actually been destroyed after the products were pulled from the shelves when the article was published and a prior lawsuit was filed in Philadelphia in 2014.

The motion states that the store admitted in writing that it “believes the voluntarily withdrawn product was destroyed pursuant to Whole Foods protocol.” Whole Foods responded with a statement not quite denying the allegations. “Whole Foods Market took reasonable steps to preserve relevant evidence for this case and we believe there is more than sufficient evidence supporting that fact.”

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photo - Michigan scamCon men are very good at sales. They know the importance of trust and how to gain it. They may be charming, tell a great story and be very convincing about the investment opportunities that are available for just the right people. And you are just the right person! That may have been the pitch to 84 year old Elsa Prince-Broekhuizen before she made her investment.

The president of a western Michigan investment company has agreed to plead guilty to stealing about $16 million from Prince-Broekhuizen, a prominent western Michigan philanthropist according to the Lansing State Journal . She’s also the widow of billionaire industrialist Edgar D. Prince.

The fraud occurred over a period of 16 years according to the felony information filed in U.S. District Court in Grand Rapids. A plea agreement states 68-year-old Robert Haveman admits to wire fraud, money laundering and causing $16.2 million in losses to Prince-Broekhuizen and the Elsa S. Prince Living Trust.

Haveman is president of EDP Management in Holland, Michigan, which managed investments for Prince-Broekhuizen and the trust. It’s alleged that at least $1 million of the ill-gotten gains were used as partial payment for a real estate purchase. Court documents state that starting in 1999 Haveman moved money into a personal account and also spent it on personal expenses and investments. Haverman falsified accounting records to hide the fraud.

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photo - post it noteIt’s hard to imagine life before the Post-It Note. Thanks to the just sticky enough pieces of paper reminders and lists can be put in all the right places to remind us of what needs to be done. One man who claims he’s the original inventor is suing 3M, Post-It Notes’ maker, for allegedly failing to live up to a settlement agreement of a prior lawsuit he filed claiming the company wrongfully claimed it’s the rightful inventor.

Alan Amron holds 40 U.S. patents, according to the Associated Press (AP), but what gets most of his attentio is the invention for which he’s not getting credit, the Post-it Note. Amron states he invented an earlier version, the Press-on Memo, in 1973 a year before 3M developed their product. Amron settled a prior lawsuit against 3M but he’s back in federal court in Fort Lauderdale, Florida, claiming 3M breached its previous, confidential agreement not to take credit for the invention.

He’s seeking $400 million in damages and an admission that Amron invented the product. “Every single day that they keep claiming they invented it damages my reputation and defames me,” he claims.

3M claims Post-it Notes were invented by their employees Arthur Fry and Spencer Silver. Silver supposedly came up with the adhesive and Fry had the idea of using it for small, yellow squares of paper. The company states neither Amron nor his Press-On Memos had anything to do with the development of their product. 3M told AP they’re within their rights in the prior settlement to claim credit for creating the Post-it Note.

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photo - Pimco caseBeing one of those who starts a business, even one worth billions of dollars, is no guarantee it will be a job for life. Bond manager Bill Gross found that out in September 2014 when he left Pimco after negative reports about his management style and weak returns at Pimco Total Return, which he had built into what was at the time the world’s largest bond fund.

Pacific Investment Management Company (or Pimco), part of German insurer Allianz SE, is a global investment management firm that manages investments for institutions, financial advisors and individuals. Gross will be able to continue his lawsuit to recoup at least $200 million dollars he claims he lost when he was forced out of his job, according to Fox Business.

Pimco accepted as final a tentative decision issued in March by California Superior Court Judge Martha Gooding in Santa Ana that Gross’ breach-of-contract lawsuit had sufficient legal claims to proceed. The lawsuit was filed in October claiming Pimco executives plotted to oust him and divide his bonus amongst themselves.

Pimco’s defense is that Gross had no employment guarantee and could have been fired at any time without cause. Gross, 71, manages the Janus Global Unconstrained Bond Fund for Janus Capital Group Inc. Of the $1.3 billion in assets Gross is managing much of it is his own. Forbes magazine estimates he’s worth about $2 billion. Gross claims he’ll donate proceeds from his lawsuit to charity.

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photo - partition refereeIf you are a part owner of a piece of real estate you may have disagreements with your fellow owners about what should be done with it. If these disagreements are serious enough the best option may be to sell the property and the owners can go their separate ways. One way this can be done is through a court ordered partition referee.

The referee’s job is to get past the differences and the problems the owners may have with each other and implement a court order to sell the property. He or she needs to determine the value of the property, sell it at a fair price and distribute the proceeds according to instructions by the judge.

Disagreements between the property owners may be caused by the property itself and what to do with it now and/or in the future or there may be other differences that spill over onto the property. Business partners or shareholders may disagree about the overall management of a company that happens to own some real estate.

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photo - OC home salesThe Orange County housing market continues to do well for sellers, buyers not so much. The Orange County Register reports that for the 22 business days ending February 9 the county’s median selling residential home price was $620,000, an increase of 8.8% compared to last year. There were 2,481 Orange County residential properties sold over the last year, an increase of 12.9% from the prior year ago.

To put this in perspective,

  • The nationwide average home value is $184,000 and through the end of January the median home price was $218,867, according to the real estate website Zillow. It states that the country’s home values have increased less than half the rate of Orange County’s increase, 4.2% over the past year.
  • Statewide 393,340 homes were sold in February 2016, up 6.4% from the same time last year, according to the California Association of Realtors (CAR). The state’s median home sales price in February was $446,460.

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2013_02_15__4814Normally a judge will not get involved in the sale of the business as long as there was no fraud and there was fair dealing with the purchase. In May the Delaware Court of Chancery did something out of the ordinary in a decision with potentially broad implications for the future of corporate takeovers, according to the New York Times. The judge decided that the board of directors of Dell Inc. under priced the company by $6 billion when the formerly public company was taken private by a buyout group led by company founder Michael Dell in 2013 for $24.4 billion.

Vice Chancellor J. Travis Laster stated in his decision there had been no higher offer and the board “and its advisors did many praiseworthy things.” However he ruled that shareholders had been short changed and Dell had to pay the plaintiff shareholders their portion of the difference. The decision got Wall Street’s attention because Laster essentially decided the free market didn’t set the right price.

Under the decision a board of directors doesn’t just have a fiduciary duty to find a buyer willing to pay the highest price, but it needs to operate knowing that a judge may finally decide later what that price should have been. Not surprisingly the decision was applauded by shareholder advocates and it may spark future lawsuits involving other companies.

There are dangers of conflicts of interest and self-dealing when management buyouts take a public company private but in this case the decision found no wrongdoing by Dell or its board. Laster decided that based on the “fair price” of the company, incorporated in Delaware, it was simply sold for too little. This case is part of a growing trend where investors buy a company’s stock after a takeover bid has been made public planning to sue the company claiming the price was too low (known as appraisal arbitrage).

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photo - 3 defendants EB5 fraudThree corporate defendants found themselves in a situation where no one wants to be: trying to convince a federal judge they shouldn’t be held in contempt. The August 30 hearing in the U.S. District Court for the Central District of California is the latest chapter in a case brought by the U.S. Securities and Exchange Commission (SEC) concerning an alleged $27 million fraud scheme.

The money allegedly came from at least fifty Chinese nationals seeking eligibility for permanent resident status through the EB-5 investor program. It allows foreigners investing anywhere from $500,000 to $1 million in a commercial U.S. enterprise, saving or creating at least ten jobs in the process, to have legal status in the country for two years with the potential for permanent legal status in the future.

The Beverly Proton Center, the Pacific Proton Therapy Regional Center, LLC, and the Pacific Proton EB 5 Fund, LLC, through their attorneys told the judge they lack access to the Continue reading

photo - fraud remediesAn ongoing fraud case involving an apparently fake plan to build cancer treatment center located in Montebello, funded by Chinese nationals seeking to take advantage of the EB-5 visa program, is an example of investment fraud. Normally fleeced investors lose money. These individuals also lost an opportunity to obtain at least temporary legal residency status in the country as well.

Investors who have been defrauded can take legal action against those who have stolen their money. How difficult this may be depends on the facts of the case and the applicable laws, which could be state and/or federal laws. Common hurdles in these cases beyond carrying the burden of proving fraud occurred is finding where the money went and then getting it back.

If the allegations against Charles Liu, Xin Wang and three corporate defendants are true, this would be a case of fraud by intentional misrepresentation. While investors were told their Continue reading

photo - Jones and Jackson lawsuitIt’s been nearly seven years since Michael Jackson’s death but that passed time hasn’t put an end to the lawsuits involving his music. The latest lawsuit in the news involves his former producer and the production and sales of Jackson’s music after his death.

Los Angeles Superior Court Judge Michal Stern ruled in February that a lawsuit over breach of contract claims filed by Jackson’s former producer Quincy Jones against MJJ Productions (controlled by Jackson’s estate) and record company, Sony Music Entertainment, involving royalties on some of the biggest hits Jones produced for Jackson can go to trial, reports the Orange County Register. He said it would be up to a jury to decide the numerous factual disputes about whether Jones is owed any money.

He sued MJJ Productions and Sony Music Entertainment in 2013 for at least $10 million. Jones claims the defendants edited songs for the “This Is It” film featuring footage of Jackson rehearsing for a concert tour, a pair of Cirque du Soleil shows featuring Jackson’s music and the 25th anniversary edition of Jackson’s album “Bad” to deprive him of royalties and production fees. He also seeks a credit on the film. Jackson’s estate and Sony Music have tried to have the case dismissed.