Shareholder Derivative, Breach of Fiduciary Duty Claim
HOUSTON — In February, Robert Burford from Houston-based business litigation firm Burford Perry led a team, along with co-counsel Jeff Diamant, of Jeff Diamant P.C.; Shawn Johnson, of SAJPLLC, and Burford Perry associate Zachary Carlson in winning a $138 million jury verdict for Laura Yosowitz, as a member of Greenlet, LLC suing its founder Martin Kay in a shareholder derivative action for breach of fiduciary duty. This week Harris County District Judge Dawn Rogers entered judgment finding Kay’s self-dealing involving Entera, another company he controls, caused $138 million in actual damages to Greenlet.
The jury found that Kay breached his fiduciary duties to and destroyed Greenlet by misusing his control over Greenlet and placing his own interests above Greenlet. Importantly, Judge Rogers ordered that “due to equitable considerations and in the interest of justice,” Ms. Yosowitz would directly recover her proportionate share of Greenlet’s $138 million in derivative damages from Mr. Kay, entitling Ms. Yosowitz to $54 million. The Court also awarded Ms. Yosowitz an additional $2 million in attorneys’ fees and costs.
“Martin Kay breached his fiduciary duties to Greenlet by self-dealing that included using Greenlet’s tech, data, assets, business, customers, and business plan for his wildly successful real estate technology company, Entera.” Mr. Burford said. “We’re heartened that the Judge studied the law, knew the facts, agreed with the jury and us, and entered a judgment to make our client whole.”
Burford Perry successfully argued that the law allows an owner in a closely held company to recover her share of the company’s derivative damages directly from the wrongdoer Martin Kay rather than from Greenlet—in which Mr. Kay and his colleague are still managers and still have control. The direct award prevents Mr. Kay from further interfering with Ms. Yosowitz’s ability to recover her rightful share of Greenlet’s damages.
The case is Laura Elizabeth Yosowitz, et al. v. Martin Lee Kay, et al., No. 2018-37750; In the 334th Judicial District of Harris County, Texas.
Burford Perry LLP is a Houston-based law firm comprised of seasoned trial lawyers representing companies and individuals in cases involving business and commercial disputes, oil and gas lawsuits, securities fraud, executive employment contracts, serious personal injuries, healthcare business operations and contracts, and trade secrets cases. The firm has prevailed on behalf of its clients in legal jurisdictions throughout Texas and across the U.S.
