Umberg/Zipser LLP secured a significant trial victory in Orange County Superior Court on behalf of a startup founder who was wrongfully removed from his company by his co-founders as the business approached its first major contract. The matter was tried by partners Phil Kaplan and Ethan Feng.
Following a bench trial, the court awarded the client the full value of his remaining salary under his employment agreement, plus interest, and treble damages for the wrongful taking of his equity, along with attorneys’ fees. The client also prevailed on all cross-claims asserted against him.
The decision is notable for the court’s acceptance of the firm’s valuation of the client’s ownership interest in an early-stage company. Rejecting defendants’ argument that the equity had no value prior to revenue generation, the court credited the plaintiff’s expert analysis and determined fair market value at the time of the taking. The court also applied California Penal Code Section 496 in awarding treble damages, reinforcing a powerful remedy in cases involving wrongful appropriation of equity.
