Facts

Plaintiffs Cheryl Mart and Terry Jones sold their company, Compumart, to Summit7 Investments Inc., pursuant to a promissory note to be paid over time. Summit7 was owned by defendant Adam Radly.

Jones and Mart sued Radly on an alter ego theory for the damage they sustained as a result of Summit7's alleged breach of the purchase and sale agreement.

PLAINTIFF'S CONTENTIONS:
Plaintiffs contended that Radly deceived them into selling Compumart with the plan of raiding Compumart's assets and that Radly never intended to honor the obligations of the purchase and sale agreement which included removing plaintiffs from their personal guarantees and paying down the promissory note.

Plaintiffs contended that, upon purchase, Radly raided the assets of Compumart, diverted them for his own benefit, causing Jones and Mart to be sued on personal obligations they had made to Compumart's creditors. Summit7 also defaulted on the promissory note.

DEFENDANT'S CONTENTIONS:
Radly contented that Compumart was financially struggling and was on the verge of failure and that Jones and Mart failed to disclose Compumart's true financial status to Radly during the course of the sale. Radly also further contended that he was not the alter ego of Summit7.

Result

On the eve of trial, Radley stipulated to judgment being entered in favor of plaintiffs in the amount of $1,140,473.

Other Information

FILING DATE: Nov. 15, 2007.