Shareholders of MLG Business Automotive Services, Inc., a Florida-based company, have filed suit against the company's sole shareholder and director following their decision to dissolve the company. The shareholder is also one of two officers for the defendant corporation.
Two shareholder representatives are seeking damages from MLG's shareholder alleging he violated his fiduciary duty for transferring assets to himself and his company while the shareholder contract prohibited it. The shareholder was also accused of transferring $700,000 in corporate assets to his personal bank accounts prior to dissolving MLG.
MLG's shareholder admitted he dissolved the company because he could not pay shareholder dividends or other expenses until MLG received funds from a lawsuit involving a collision. The shareholder claimed he also informed the shareholder representatives of his intention to dissolve the company and pay shareholder installments with settlement funds from the collision case in question.
Plaintiffs allege shareholders breached his fiduciary duty when he failed to inform them of the impending dissolution. Plaintiffs also claim shareholders transferred assets for less than fair market value and engaged in self-dealing.
The shareholder representatives claim they would not have approved the shareholder's decision to dissolve the company and transfer shareholder assets if they knew of his plans.