Austin, TX (Law Firm Newswire) September 20, 2013 — A well-known Texas investor and philanthropist has been sued in an investment dispute.
Ted Skokos is accused of breach of contract, fraud and breach of fiduciary duty in the lawsuit filed by Arthur Abbey. The lawsuit claims that in 2005 Abbey made a $4 million investment in 3F Therapeutics, a medical device company founded by Skokos, with the parties agreeing that Skokos would get 20 percent of profits after Abbey received capital from his investment. The complaint alleges that profits were taken out before Abbey was paid back.
“An investment deal gone wrong is a common cause of business litigation,” said Austin business attorney Gregory D. Jordan. “Here the plaintiff alleges not only breach of contract, but fraud and breach of fiduciary duty as well.”
According to the complaint, after Skokos received the $4 million, he convinced Abbey to allow him to transfer the money to a limited partnership, 3F Management II, intended to facilitate the investment. The lawsuit claims that Skokos gave Abbey assurances that the money would be secure.
The complaint further alleges that in 2006, 3F Therapeutics was merged with ATS Medical Inc., which was then purchased by Medtronic Inc. Medtronic purchased all of ATS’ outstanding stock as part of the merger deal, including Abbey’s shares in the limited partnership.
The lawsuit claims that more than $7 million was generated by the buyout, with about $4.7 million being attributable to Abbey’s investment. Abbey alleges, however, that Skokos took 20.8 percent of the gross profits – more than $1 million – before paying Abbey.
The result, according to the complaint, is that Abbey suffered a significant loss, even though there was a sufficient amount of money generated from the sale for him to be repaid with a profit.
Harold Asher, an accountant, is also named in the lawsuit. The complaint alleges that Asher provided a factually inaccurate analysis justifying Abbey’s plan for distribution of profits.
Skokos and his wife Shannon are known in Dallas for their $10 million donation to the AT&T Performing Arts Center.
The lawsuit seeks damages, including punitive damages, in excess of $1 million.
To learn more, visit http://www.theaustintriallawyer.com/
Law Offices of Gregory D. Jordan
5608 Parkcrest Drive, Suite 310
Austin, Texas 78731