On September 20, 2024, Clark Smith Villazor earned a post-trial win for its clients, Sanjiv Mehra and the trustee of his family trust, in a Delaware Chancery Court dispute arising out of Mr. Mehra’s former business partner’s effort to oust him from EOS—the popular consumer-products business that Mr. Mehra co-founded and built—and deprive Mr. Mehra and his family trust of their economic rights.
Delaware Chancellor Kathaleen McCormick, in a 31-page post-trial opinion, found that Mr. Mehra’s former business partner, Jonathan Teller, breached his contractual obligations and his fiduciary duties by refusing to honor the Mehras’ economic rights to equal sharing of contractually defined distributions.
The court agreed with CSV’s arguments about the meaning of the key contractual provisions, finding that “only Plaintiffs’ interpretation is faithful to the plain language” of those provisions. The court also agreed that CSV had proven that Teller acted “in bad faith,” finding that: “Teller’s conduct both before and during this litigation amounts to the type of intentional dereliction of duty and conscious disregard for one’s responsibilities that constitutes bad faith.”
Chancellor McCormick held that the Mehras are entitled to have their rights to equal economic sharing honored and to be paid damages for distributions not paid at the equal sharing ratio, along with pre-judgment interest.
The Delaware case is one of a number of lawsuits CSV filed on behalf of the Mehras relating to Mr. Teller’s effort to remove Mr. Mehra from EOS. The other lawsuits include three cases in New York Supreme Court’s Commercial Division: a books-and-records action; a lawsuit against the law firm that jointly represented Mehra and Teller in drafting the relevant contractual provisions; and a derivative case seeking to stop Teller from using company funds to defend the Delaware case.
Brian Burns, Patrick Smith, and Jeff Rotenberg tried the Delaware case for CSV on behalf of the Mehras in February 2024. Brian Burns argued the case at the post-trial oral argument in June 2024.
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