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Loomba Obtains Victory in Bankruptcy-related Bench Trial

April 25, 2011

Lalit K. Loomba (Of Counsel-White Plains) prevailed in an adversary proceeding filed in connection with a bankruptcy in the United State Bankruptcy Court for the Southern District of New York. Wilson Elser represented an architectural services firm, the debtor, in the bench trial. The defendants were former key employees of the firm. The plaintiff alleged that the employees breached their fiduciary duty of loyalty to the firm by diverting corporate opportunities away from the plaintiff. The plaintiff also brought a claim against one of the defendants for money owed under an oral loan agreement.

Following the bench trial, the judge ruled in the plaintiff's favor, finding that the defendants had breached their duty of loyalty and as a result forfeited all compensation during the period of disloyalty. The judge also found that plaintiff proved the existence of the loan agreement and the amounts due to him. The ruling is notable in that the judge awarded prejudgment interest on both the breach of fiduciary duty and loan agreement claims.

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