The first case involves a business that was served with papers naming them as defendants in a lawsuit.  The manner in which the business was conducted apparently left a gaping hole for the transfer of documents from the day-to-day operations of the business to the management of the company.  On several occasions papers involving the lawsuit failed to reach management which resulted in a default judgment in an amount in excess of $1 million.  The most salient factor about this case is that, had our clients responded initially, there was no likelihood that the plaintiffs would have had any recovery against our clients and the cost of representing them would have been about one tenth of what it will cost them to dig them out of the hole they are in.  We are now involved in an expensive battle to vacate that judgment which is certainly not a sure thing.  The lesson   —  whether you are a business or an individual it is your responsibility to see to it that legal documents received by you are reviewed by a competent attorney and a determination made as to what is necessary in order to protect your interests.  The cost of that review is minimal, especially when compared to the losses that can be encountered if you fail to respond.

Approximately 2 weeks after we began work on the above matter a similar case came to us from our forwarding counsel in Australia.  The client is a sophisticated world businessman with interests in the United States, Europe and the Middle East.  This client has had his Real Estate (valued in excess of  $2 million) seized by an individual that he believed was his managing agent at that property.  The short version of what had occurred is a business associate of our client was installed in the U.S. to manage his business interests at a particular horse location used for the training of race horses.  The business associate filed a lawsuit making fraudulent claims and then intercepted all of the legal documents. As a result a judgment was obtained and a sheriff’s sale resulted in the sale of the property to the same individual who engaged in the fraudulent activity.  This case is pending before the courts, with a lis pendens placed on the property by our offices which will protect the property from being conveyed to any innocent third party while we conclude our fraud claims against the former perpetrator of the fraud.  The lesson—you must have trustworthy people reviewing your mail and acting on your behalf.  It is recommended that more than one person be involved in the receipt and review of mail. There is no sure way to protect against fraud but checks and balances will help.  Call us if you need assistance protecting your business, whether before or after the disaster occurs.

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