This is a brief article I found about a large verdict in South Carolina. I's pointing it out, because it shows an example of a structured payment of $500,000 over time. This is the part of that settlement that can be sold in part or in its entirety.
Charleston, SC (PRWEB) March 13, 2008 -- Charleston lawyer Joseph P. Griffith Jr. has been credited with winning South Carolina's third largest verdict or settlement in 2007. The $3.8 million recovery by Griffith also ranked as the second largest jury verdict, according to Lawyers Weekly, a statewide legal newspaper that publishes an annual survey of verdicts and out-of-court settlements. Griffith, a former federal prosecutor with 25 years of litigation experience, was the lead trial attorney in a dispute over a $90 million sale of golf course properties. Two North Carolina attorneys, James Gatehouse and Ross Fulton of Charlotte, also assisted on the case.
The case is Larry D. Young, et al. v. Golf Trust of America, Inc., et al. (No. 4:04-CV-908-TLW).
Mr. Young had a duty to disclose the potential adverse impact on the company. If we had known he was going to sue us, we would have upped the price, if we had sold at all.
The case pitted Griffith's client, Golf Trust of America, Inc., against Larry D. Young, a Myrtle Beach golf course developer. Other members of the Young family were also named in the suit. Young helped form Golf Trust in the 1990s as a real estate investment trust (REIT) and served on the board of directors. At one time the REIT owned about 48 high-end golf courses, but the company fell on hard economic times and a liquidation plan was approved in 2001.
"The crux of the case grew out of that liquidation", Griffith said. "Larry Young wanted to buy back some of his properties that had become part of Golf Trust. In negotiations over those properties he failed to disclose that he might be planning a lawsuit against Golf Trust and its officers."
"A member of the board of directors of a public corporation has fiduciary duties of full disclosure, trust and loyalty to the shareholders, especially when a board member is trying to acquire corporation assets," Griffith continued. "Mr. Young had a duty to disclose the potential adverse impact on the company. If we had known he was going to sue us, we would have upped the price, if we had sold at all."
Young filed a lawsuit against Golf Trust in March 2004. Griffith said he and his co-counsel quickly figured out that Golf Trust had a claim against Young. "This case was very ironic because the original plaintiffs sued my clients on a claim that we did not think had any merit," Griffith said. "When I started digging into the facts, I found some information that I thought constituted a claim against the plaintiffs over Mr. Young's conflict of interest and breach of a confidentiality agreement."
The Youngs' claim against Golf Trust was eventually thrown out by a federal judge, while Griffith's counterclaim generated a multi-million dollar verdict.
In August 2007, following a week-long trial, a jury awarded $3.73 million in damages to Golf Trust. The jury also awarded $150,000 in attorney's fees related to the breach of a confidentiality agreement, boosting the total judgment to almost $3.88 million. The judgment was filed August 17, 2007 in the U.S. District Court's Florence Division.
"This case shows that you're held to a very high standard when you're a fiduciary on the board of directors of a publicly traded company," Griffith said. "The shareholders are placing their trust in you, and you have a high duty of loyalty to them. If you breach that trust, you can be held liable for the damages caused by that breach."
Final Settlement:
As is the case with many verdicts, the parties negotiated a final settlement in the case. The settlement was filed in U.S. District Court in early February.
"They gave us some valuable land and agreed to pay $500,000 in structured payments. They also executed a note which says if they don't make the foregoing payments, or give us the land in the condition we're expecting it, then they would owe us the entire $3.8 million, subject to off-set by what they have already given us," Griffith said.
