Facts

Plaintiff Irell & Manella LLP and defendant Prestige Ocean Properties LLC (Prestige) entered into an agreement on April 11,2005. Under the agreement, Irell & Manella agreed to provide legal services to Prestige, and its subsidiary, defendant KGMAC, LLC, in connection with the acquisition of property in Beverly Hills, California. Stephen King executed the agreement on Prestige's behalf.

Subsequently, Irell & Manella provided legal services as agreed, including services in connection with the formation of KGMAC, which was designated to acquire, develop and re-sell the property. Irell & Manella also assisted in negotiations with Charles Dickens, who purported to be the manager and 100 percent owner/controller of the membership interests in Tower Park Properties LLC (TPP), the entity holding the property as its sole asset. The negotiations were related to the acquisition of the property either directly or through the purchase and sale of TPP membership interests, but did not yield either result.

On Aug. 5 Irell & Manella entered into an agreement with KGMAC, to provide legal services in connection with a dispute with Dickens and TPP regarding the failure to finish the deal. The agreement was executed by Stephen King. Acting under both legal services agreements, Irell & Manella filed suit against Dickens and TPP. The parties to that litigation reached a settlement whereby Dickens and TPP would pay Prestige $600,000, with reductions and increases based on payment time periods. The settlement also stipulated that if payment was not made on or after Jan. 1, 2008, judgment would be entered in favor of KGMAC and Prestige for $1,000,000.

By January 2008, the payment had not been made, and judgment was entered on Jan. 31. Based on the judgment, KGMAC and Prestige obtained a judgment lien on the property.

PLAINTIFF'S CONTENTIONS:
Irell & Manella contended that KGMAC and Prestige failed to pay for the legal services provided. It claimed that no individuality and separateness existed between Deborah and Stephen King and that of KGMAC and Prestige, due to a unity of interest and ownership. Irell & Manella also alleged that an abuse of corporate privilege and promotion of injustice would result if it was not paid for its substantial legal services requested by and directly benefiting the Kings. It further contended that the Kings should not be allowed to use under capitalized corporate shells in order to avoid payment.

Damages

Irell & Manella claimed $240,974 in damages.

Result

The parties reached a settlement.

Other Information

FILING DATE: Nov. 18, 2008.