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ARTICLE ID 40976
$________ INCLUDING $________ PUNITIVE AWARD - ACCOUNTING MALPRACTICE - UNDERVALUATION OF REAL ESTATE HOLDINGS - OVERSTATEMENT OF CORPORATE LIABILITY - LOSS OF PROPERTY.
Butler County
The plaintiffs husband and wife, who were former shareholders in
four corporations which retained the defendant accounting firm
for evaluation of the businesses, alleged that the defendant
provided inaccurate and false information to a bankruptcy court,
resulting in an entire loss of the plaintiffs property. The
defendant maintained that it used standard accounting principles
and methods which are accepted throughout the industry.
The evidence established there was a federal investigation
concerning one of the corporations in which the plaintiffs were
shareholders. The corporation was accused of overselling the
interest in properties it owned. Some of the corporate
shareholders, including the male plaintiff, were indicted in
connection with the charges. The four corporations were then
placed into a bankruptcy proceedings.
The defendant accounting firm was retained by the chief executive
officer of the four corporations in which the plaintiffs were
shareholders. The defendant accounting firm was responsible for
advising the bankruptcy court as to the financial condition of
the corporations. The plaintiffs alleged that all of the
corporations were described as being insolvent by the defendant
accounting firm when they were, in fact, solvent.
The plaintiffs claimed that as a result of the information
provided by the defendant and the way the bankruptcy schedules
were prepared, all of the combined corporate assets were turned
over to investors and the plaintiffs lost everything.
The plaintiffs contended that they owned one property worth $90
million which was consolidated with the assets of the
corporations. The $90 million property was described by the
defendant as being worth only $2 million, according to the
plaintiffs claims.
In addition, the plaintiffs alleged that one corporation which had
taken money from investors was described by the defendant as
having $70 million in debt. The plaintiffs claimed that this
corporation actually had $70 million in equity with a much lower
debt figure.
The plaintiffs accounting expert testified that the defendant
violated acceptable accounting standards and had provided
incorrect information to the bankruptcy court, resulting in the
plaintiffs entire interest being seized and given to the
investors who had lost money.
The plaintiffs denied responsibility for any corporate wrongdoing
and maintained they were not liable to the investors. The
plaintiffs economist estimated the plaintiffs lost $68 million
in property. The defendant did not dispute that figure. The
defendants accounting expert opined the defendant did not
violate any accounting rules.
The case was tried as a bench trial with an award to the
plaintiffs in the amount of $________. The award included
$________ in punitive damages plus interest. Posttrial motions
are pending.
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- Determine if a case is winnable and recovery amounts.
- Determine reasonable demand for a case early on.
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- Defeat or support post-trial motions through past case histories.
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