This was originally published on the SGR Blog.
Court Determines if Seller Has Legally Cognizable Claims
Our Courts usually do not permit a breach of contract claim to be escalated to the business tort of breach of fiduciary duty. But, as a recent case illustrates, unique circumstances, collateral factors, and allegations of fraud and concealment may justify the claim.
Tiny 1, Ltd. and others alleged that Georges Berberi and Matt Auerbach, both of whom were affiliated with Samfet Marble Inc., sought to purchase Tiny 1, formerly known as Port Morris Tile & Marble Corp., and schemed to control Port Morris’s financial operations while its sole owner, Vincent DeLazzero, was ill. The complaint further alleged that Berberi and Auerbach fraudulently concealed wire transfers from Port Morris to Samfet, increased Port Morris’s debt, denied DeLazzero timely access to Port Morris’s books and records, which had been falsified by James Coyle and Michael Giambra, and ultimately forced DeLazzero to sell Port Morris for far less than it was originally worth.
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