After two years of litigation and a full week of trial, we successfully testified to the economic damages sustained by the defendant owners of a Savannah, Georgia Volvo car dealership resulting in an award to them of $1,600,000 in economic damages plus punitive damages and attorney fees, rather than the over $5 million sought by the plaintiffs.
Background: In 2013, defendant entered into a “handshake” agreement to sell his Volvo car dealership to the third-party plaintiffs, who also owned and operated a Mitsubishi dealership on the same campus. As part of their agreement, the plaintiffs were to take over complete control of the operations of the Volvo dealership in anticipation of the acquisition. For four years, plaintiffs continued to operate both dealerships while trying to obtain the necessary approvals and financing to complete the Volvo purchase. During this time, the plaintiffs undisputedly infused capital of over $1,250,000 into the Volvo dealership. In 2017 the defendant terminated the plaintiffs’ employment after discovering they had embezzled millions of dollars and caused additional damages to the dealership. Within a month, plaintiffs filed suit claiming wrongful termination and damages of over $5.1 million.
Success: We were retained to perform a forensic analysis of the books and records of the Volvo dealership for the four-year period that it was operated by the plaintiffs. In the process of our analysis, we were able to prove that plaintiffs had co-mingled the Volvo financial assets with that of their own Mitsubishi dealership. We further demonstrated that they had embezzled millions of dollars from the Volvo dealership while at the same time failing to preserve its books and records. Through extensive analysis, we were able to reconstruct the financial records and therein prove the embezzlement and economic damages. The jury found that defendant was entitled to keep the $1,250,000 of capital infused by the plaintiffs, plus an additional award of $1,600,000, punitive damages, and attorney fees.
LVF Practice Group Profile
Our Litigation, Valuation, and Forensics Practice Group (LVF) continues to balance its practice between our three core service areas of litigation support, business valuations, and forensic fraud investigations. As a part of this practice, we are well experienced in complex business litigation and large white-collar fraud investigations for which we have served as testifying expert on many occasions.
Valuation work continues to be a fundamental issue in litigation, merger and acquisition consulting, and shareholder disputes. Our involvement in business transaction support services continues to grow as we continue to differentiate ourselves from traditional CPA firms as valued partners to attorneys, government investigators, and lenders.
While many traditional CPA firms are generalists when it comes to LVF services, we have committed to this practice space one hundred percent with professionals dedicated to this specialty area.
Chris Edwards
(478) 330-5241
cedwards@mmmcpa.com
John Houser
(478) 330-5320
jhouser@mmmcpa.com