Mark Vakili v. Tony Shahbaz, et al.
Published: Apr. 1, 2003 | Result Date: Feb. 21, 2003 | Filing Date: Jan. 1, 1900 |Case number: 01CC09894 Verdict – $7,200,000
Judge
Court
Orange Superior
Attorneys
Plaintiff
Christina M. Coleman
(Law Offices of Christina M. Coleman, APC)
Jeffrey G. Huron
(Dykema Gossett PLLC)
Defendant
Jerome M. Jackson
(Law Offices of Jerome M. Jackson)
Experts
Plaintiff
David J. Weiner M.B.A., AM
(technical)
Facts
In June 1999, the defendant IOM Holdings agreed to acquire the assets of plaintiff, Hi-Val Inc. which sold computer goods to mass retailers. Hi-Val had annual sales of approximately $86 million and a $25 million credit facility with Finova guaranteed by the plaintiffs, Mark and Mitra Vakili. The Vakilis were majority shareholders of Hi-Val and owned Hi-Val's warehouse facility. IOM Holdings agreed to pay Hi-Val two million shares of I/O Magic stock and to repay Mark Vakili's $1.5 million loan to Hi-Val. The defendant Tony Shahbaz was the CEO of IOM Holdings and I/O Magic. Shahbaz negotiated with Finova to transfer the credit facility to IOM Holdings. Subsequently, Hi-Val made a general assignment of its assets for the benefit of its creditors, to Development Specialist Inc. (DSI). After the assignment, IOM Holdings did not pay Hi-Val or Mark Vakili. In March 2000, IOM Holdings purchased Hi-Val's assets from DSI by assuming Hi-Val's obligations to Finova. In addition, the Vakilis agreed to transfer the Hi-Val warehouse to Shahbaz in exchange for one million shares of I/O Magic. Shahbaz did not transfer the one million shares to the Vakilis until after they filed suit.
Settlement Discussions
The plaintiff demanded $27 million. The defendants offered approximately $1 million, which was refused with no counter-offer.
Result
The plaintiff verdict of $7.2 million included $1,350,000 in punitive damages against the defendant, Tony Shahbaz. The verdict was against IOM Holdings and Tony Shahbaz only.
Deliberation
three days
Poll
12-0 (breach of contract), 11-1 (fraud), 9-3 (malice and oppression)
Length
four weeks
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