The Law Office of Jason Ingber has filed a lawsuit in the Los Angeles County Superior Court on behalf of an investor alleging breach of fiduciary duty, fraud, and conversion against business partners who allegedly misused company funds and failed to provide required financial records.
Background of the Investment Dispute
According to the complaint, the parties formed a limited liability company (LLC) to acquire, remodel, and manage a multi-unit residential property in Los Angeles. The investor contributed substantial capital toward the purchase and redevelopment of the property in exchange for an ownership interest exceeding 20% of the company.
However, after the property was acquired, the managing members allegedly began diverting company funds to unrelated real estate ventures without informing or obtaining consent from the other investors. Despite multiple requests, the managing members failed to provide financial statements, project cost reports, or documentation of how funds were spent.
Allegations of Mismanagement and Self-Dealing
The complaint alleges that the managing members engaged in a pattern of self-dealing, unauthorized transfers, and misuse of investor funds. Specifically, they are accused of:
-
Spending more than $100,000 of company funds on unrelated real estate projects;
-
Reporting over $400,000 in unverified “reimbursements” and personal expenses;
-
Using the LLC’s refinancing proceeds to pay themselves rather than distribute profits according to ownership percentages; and
-
Failing to provide required accounting and financial records under both the LLC Operating Agreement and California law.
The lawsuit also claims that the defendants issued a capital call to investors — demanding additional funds — after depleting the original investment for unauthorized purposes.
Claims Filed in the Lawsuit
The lawsuit asserts multiple causes of action, including:
-
Breach of Fiduciary Duty: for diverting company funds and failing to act in the best interests of all members;
-
Breach of Contract: for violating the terms of the LLC’s Operating Agreement and failing to maintain accurate financial records;
-
Conversion: for misappropriating company assets and depriving investors of their rightful distributions;
-
Fraud: for inducing additional investments through false statements and concealing the misuse of funds;
-
Accounting: for refusing to produce required financial documentation; and
-
Dissolution and Winding Up: seeking court-ordered dissolution of the LLC and appointment of a receiver to protect remaining assets.
The complaint seeks over $500,000 in damages, plus punitive damages, disgorgement of profits, and a full accounting of all company transactions.
Protecting Investors from Financial Misconduct
At the Law Office of Jason Ingber, we represent investors and business partners who have been misled, defrauded, or financially harmed by corporate mismanagement. Our firm handles complex business and real estate disputes involving breach of fiduciary duty, partnership fraud, and misuse of company assets.
We work to hold business managers and controlling members accountable when they abuse their positions of trust, conceal financial information, or misuse investor funds.
Contact The Law Office of Jason Ingber
If you have been excluded from company decisions, denied access to financial records, or believe your investment funds were misused, you may have legal grounds to act.
Contact us today for a free consultation to discuss your rights and options. Our attorneys can help you pursue compensation, an accounting, or dissolution of the company if necessary.
We work on a contingency fee or hybrid structure, meaning you do not pay unless we recover compensation for you.