Facts

Carl Stork and John Textor were members of the board of directors for Digital Domain. They were each shareholders of Digital Domain. Century Communication LTD. of Noidia, India, expressed interest and actual proposal to purchase all of the shares of stock in Digital Domain. Unbeknownst to Stork, Textor had been involved in secret communications with Century. Textor hid his communications with Century, including a letter of intent (LOI) to purchase the company for $65 million from the board of directors, management, and other shareholders. Stork sued Textor, Jonathon Teaford, and Digital Domain Holdings Inc. (DDH) for fraud, violation of California Corporations Code, and rescission of stock purchase agreement. Stork claimed that the defendants hid the LOI because they were pressuring him to sell his stock at a steep discount, and they attempted to induce him to resign from his position, as well as siphon off Digital Domain's goodwill and assets for Stork's new company, DDH.

DEFENDANTS' CONTENTIONS:
Defendants contended that there was no evidence to support a claim for fraud, violation of California Corporations Code, claim of rescission, or for negligent misrepresentation. Defendant further contended that the plaintiff released the claims asserted in his complaint pursuant to the Release and Indemnification Agreement that was executed in connection with the Stock Purchase Agreement.

Damages

Stork sought a rescission of the Stock Purchase Agreement and all related documents, including the Release and Indemnification Agreement as well as declaratory relief that the above-mentioned documents were null and void. Stork also sought damages, including punitive damages, interest, attorney fees and costs and other relief.

Result

The parties agreed to a $10 million settlement.