Burford Perry Wins $155 Million Verdict in Fraud and Breach of Fiduciary Duty Case
HOUSTON — Robert Burford led a team from Houston-based business litigation firm Burford Perry, along with co-counsel Jeff Diamant, of Jeff Diamant P.C.; and Shawn Johnson, of SAJPLLC, in winning a jury verdict totaling $155 million in damages in a complex fraud and breach of fiduciary duty lawsuit on behalf of Laura Yosowitz and Greenlet, LLC.
On February 21, after a two-week trial, jurors in Harris County’s 334th District Court found in favor of Ms. Yosowitz against her ex-husband, Martin Kay, CEO and majority shareholder of Entera, a “leading real estate technology company” that is funded by private equity investors like Bullpen, Craft, and Goldman Sachs. According to its website and evidence at the trial, Entera facilitates institutional investment in single family homes using big data and its artificial intelligence platform. It claims to have enabled transactions on 14,000+ single family homes valued at $4.6 billion across 29 US markets.
As part of the couple’s 2016 divorce agreement, Mr. Kay agreed to raise capital and commercialize Greenlet’s software platform and associated real estate brokerage business. Greenlet had by then serviced six of the nine largest institutional single family home investors in the country, including Invitation Homes, Colony Capital, and 643 Capital. Ms. Yosowitz argued that instead of building Greenlet, Mr. Kay used its funds, software code, data, customers, developers, business plan, and prospective investors for his newly formed company, which later changed its name to Entera.
The jury found that Ms. Yosowitz was a member of Greenlet, that Martin Kay owes Greenlet $138 million for his breach of fiduciary duty to the company, and that Mr. Kay is liable to Ms. Yosowitz, individually, for more than $17 million total associated with claims for breach of fiduciary duty, fraud, and breach of contracts.
At its heart, this lawsuit is about Mr. Kay’s misuse of his control over Greenlet’s ownership and usurpation of a business opportunity, said Mr. Burford, lead counsel to Ms. Yosowitz.
“Martin Kay breached his fiduciary duties — both to his ex-wife and to Greenlet — by self-dealing that included using Greenlet’s assets, business, and business plan to create today’s wildly successful Entera,” he said. “We’re heartened that the jury agrees with us and took steps to make them whole.”
The case is Laura Elizabeth Yosowitz v. Martin Lee Kay, et al., No. 2018-37750 in 334th District Court. Judge Dawn Rogers presided at the trial.
Burford Perry LLP is a Houston-based law firm comprised of seasoned trial lawyers representing companies and individuals in cases involving business and commercial disputes, oil and gas lawsuits, securities fraud, executive employment contracts, serious personal injuries, healthcare business operations and contracts, and trade secrets cases. The firm has prevailed on behalf of its clients in legal jurisdictions throughout Texas and across the U.S.