On April 7, 2008, Chrissy Brashear filed suit against Ellora’s Cave alleging that she was entitled to a distribution of profits from 2005 until the date at which defendants bought out her 5% shares. EC’s response to the litigation was to not participate.
The trial brief also asserts that Ellora’s Cave is diverting assets away from the company. First, by borrowing money through commercial lines of credit and loans in EC’s name and then transferring those loan funds to Engler, Marks, and others at substantially lower interest rates. Second, EC is paying above market rate rent to its landlord (who happens to be Tina Engler). For example, in 2009, the market rent is around $40,131, and EC was paying to Engler $97,200 in rent.
All told, Brashears claimed about $350,000 in actual economic damages as well as damages for defamation and punitive damages (designed to “punish” the wrongdoer as opposed to “compensatory” damages that are designed to make the plaintiff “whole”) and attorneys’ fees.
Full story here.