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Representative Cases

Representative Cases

I approach law with a deep understanding of how businesses think, operate, and make litigation decisions. I am a former co-founder, CEO, and shareholder with 20 years of real business experience before starting my law practice in 2013. I understand partner disputes and shareholder issues (from a majority and minority shareholder perspective) in ways most attorneys don’t. Businesspeople view the world differently than lawyers. Understanding their perspective helps resolve cases.

While there are no guarantees in litigation, Chatow Law wins or favorably settles the vast majority of cases we accept. I attribute our high success rate to my business background. In our business contingency practice area, we have to succeed, or we don’t get paid.

Below are examples of the types of cases we handle:

Case Type: Minority Shareholder Oppression

Family Owned Business – Excessive Distributions, Personal Expenses.

The majority shareholders in a family-owned business had been taking excessive distributions for years. Their above-market salaries and personal expenses, including extravagant vacations and cars, had left our client, a minority shareholder, with far less than his fair share of the profits. After the client’s former counsel had rapidly billed six figures in legal fees without getting any closer to a resolution, we stepped in to handle this minority shareholder oppression case on contingency.

In less than six months, we had the case in settlement discussions, and the client obtained a substantial cash settlement.

Case Type: Fraud – Breach of Contract – Minority Shareholder Oppression

Commercial Retailer – Fraud, Breach of Contract

This case started as a relatively straightforward breach of contract case. Our client was promised the right to purchase an interest in a successful business, but the company never allowed the purchase. When our client threatened to pursue the matter, the opposing parties attempted to leverage unrelated claims in another matter and improperly cut off distributions our client was owed by another company they jointly owned–leading to another lawsuit.

If we had taken a conventional approach and rushed into an all-out legal battle, the cases would have been stuck in litigation for years. Instead, we took a strategic approach to navigate a resolution that achieved our client’s goals on a much quicker timeline. Within a few months, our client received their unpaid distributions, and several months later, all of the cases were settled with a multi-million dollar cash payment to our client.

Case Type: Fraud – Minority Shareholder Oppression

B2B Commercial Distribution Company – Minority Shareholder Oppression, Fraud

Our client was a founding shareholder, director, and key executive in a high-growth business. Directors have the right, and often an obligation, to voice their opinions about the company’s management. But when our client challenged the company’s CEO on an important business decision, the CEO summarily terminated him and alleged that he no longer owned any interest in the business.

We replaced our client’s original law firm after he had filed suit when he realized he needed a more strategic partner to win what promised to be a lengthy battle. Our client’s claims originally included (1) breach of contract and (2) breach of fiduciary duty against the other shareholders. The company unsuccessfully attempted to battle an amendment to the complaint and name the entity with more precision. It also eventually filed a cross-complaint for leverage, alleging millions of dollars in damages supposedly caused by our client.

After a devastating deposition of their CEO and discovery that the defendant company had produced what appeared to be a false version of a critical corporate document, we settled the case shortly before trial. The company agreed to a substantial settlement payment. In addition, the defendant fully released our client from their millions of dollars in alleged damages claims.

Case Type: Fraud – Breach of Fiduciary Duty – Minority Shareholder Oppression

Family Owned Real Estate Company – Minority Shareholder Oppression, Fraud, Breach of Fiduciary Duty

Our client was instrumental in growing a multi-million dollar family business and had secured a substantial stake in the company and a share of ongoing revenues. Another family member decided our client was earning too much and unilaterally terminated our client’s revenue share. In addition, they completely disavowed our client’s interest in the company and entered into what appeared to be a set of contrived transactions with an affiliated entity in an attempt to hide our client’s ownership interests.

After our client sent a demand for financial records to the affiliated entity, opposing counsel wrote back that the majority and affiliated owners would litigate any claims. They emphasized that the litigation would be vigorous and expensive, and threatened that their counterclaims would cost “hundreds of thousands” to “millions of dollars” to defend, and they would never pay a dollar in settlement.

We filed suit against the family member and affiliated entity a few days later for judicial dissolution, breach of fiduciary duty, breach of oral contract, and other related causes of action. After multiple discussions about the case with opposing counsel, the attorney who had written the “never pay a dollar” letter reached out to us about the possibility of mediation. With the help of a retired-judge mediator renowned for his ability to mediate family business disputes, we settled the case in mediation with a seven-figure payment to our client and a complete release of any claims alleged by the other parties.

The matter was resolved less than four months after filing the lawsuit. While most cases don’t settle this quickly, this matter is an example of what can happen when a contingency fee arrangement allows a client to bring suit with confidence that they have counsel who will go the distance.

Case Type: Business Sale Fraud

Fabrication Company – Business Purchase

While buying a business can be hugely rewarding, it can also be highly risky–even when you have a financial background and substantial business experience. Our client purchased a business and did the financial due diligence himself. But it wasn’t until after the sale had closed that he realized that the financials he had been presented with had materially misrepresented the business income.

While the business purchase agreement called for mandatory mediation of any disputes, opposing counsel made it clear that they believed our client’s allegations were baseless and that neither the numbers nor their client had lied. Even though mediation is a non-binding resolution process, and not akin to arbitration, where a case is actually decided by an arbitrator, we realized that our only chance to resolve the matter before lengthy litigation was to prepare for the mediation almost as if we were going into arbitration.

We put together a comprehensive analysis of the financials that proved without question that our client’s position was correct and headed into the mediation with the confidence that we had strong evidence of the seller’s false financials should we litigate.

After a full day of hearing the truth, the opposing counsel finally had to accept the reality that his client’s numbers actually did lie. The case was settled in mediation for a substantial cash settlement. Our client was thrilled with the outcome.

Case Type: Business Fraud, Intentional Interference

Electronics Manufacturer – Fraud, Intentional Interference With Contract

We represented an electronics distributor who had landed a large, multi-year opportunity to supply components to Mexico’s national electricity utility. The client found an overseas manufacturer with what was represented to be a U.S. headquarters office. The parties signed a non-circumvention agreement that prohibited the manufacturer from cutting out our client and going directly to the customer.

After successfully supplying a large number of parts to the customer, our client suddenly learned that the manufacturer had breached the non-circumvention agreement and was communicating with and shipping parts directly to the customer. Our client also learned that the alleged “North American Headquarters” they were dealing with was actually just a sales representative for the Taiwanese manufacturer.

When our attempts to resolve the matter informally were unsuccessful, we filed suit against the Taiwanese manufacturer and their U.S. representative’s office and ownership for breach of contract, fraud, intentional interference with contractual relations and prospective economic advantage, and negligent interference with prospective economic advantage.

While we continued to attempt to resolve the matter all the way up to and even during trial, the defendants refused to make any settlement offer whatsoever. After trial, the judge found in our client’s favor and awarded damages of nearly $900,000. When Defendants failed to pay the judgment, we aggressively pursued the amount due. We initially collected nearly $200,000 through multiple bank levies, and then sought an assignment order from the court ensuring that the LLC which held the defendant’s business’ real estate premises could not sell the property and distribute proceeds to the individual defendant who owned the business. Once the court granted our assignment order and cut off the sale of the business property, we then began the process to force the sale of the owner defendant’s residence. Shortly after we began those efforts, new counsel for defendant reached out to suggest a mediation of the remaining judgment balance. Shortly after the mediation, the defendant paid the full amount of the balance agreed to in mediation in full.

Case Type: Breach of Contract

Fortune 500 Company – Commerical Collections

In 2015 we began working with the Orange County location of a Fortune 500 company that is the largest uniform rental and facility services provider in the country. Our initial focus was to handle all breaches of their commercial contracts with their business customers.

Rather than taking the conventional approach to commercial breach of contract matters and collections, we looked at things differently from the start. With 20 years in business before opening Chatow Law, we realized that it would be far more valuable (and cost-effective) for our client in most cases if they could reinstate business with the customer rather than litigating over the outstanding AR balance, lost rental items and damages for breach of the contract.

We created a framework that allowed us to share in the success for every customer we were able to successfully bring back, and began to earn a reputation for helping even the most difficult customer situations turn into wins for our client.

The program was a huge success, and eventually, all of the customer’s locations throughout Southern California, including San Diego County, Los Angeles County, Orange County, and Riverside County, began using us for their commercial breach of contract matters. As one General Manager at a client’s locations said when they were asked how they kept their customer retention rates so high, “Chatow Law is our secret weapon.” To date, we have brought back millions of dollars in business to the customer.

But because not every case can be resolved early or with a reinstatement of business, where customers were unwilling to work with us, we have also aggressively pursued collections and breach of contract matters on our client’s behalf. Except for one matter where neither party prevailed, to date we have either won or come to an acceptable resolution to every matter we’ve brought to litigation or arbitration for this client.