Always preparing for litigation

With complex business litigation, sometimes you need a flow chart simply to keep track of everything that is going on within the proceedings. The recent announcements of criminal charges being filed in the case involving three former Starkey Hearing Technology executives only increased the complexity of what is a tale of byzantine complexity of involving accusations of whistleblowing, wrongful discharge, corporate fraud and criminal embezzlement.

We do know three executives, including the president, chief financial officer and the head of human resources were fired. The former president and others then filed wrongful termination lawsuits claiming they were fired perhaps in relation to their knowledge of alleged financial fraud and misuse of corporate funds and tax fraud by the owner, his wife, and stepson.

The three former executives are accused in the criminal indictment of a variety of corporate wrongdoing involving setting up of sham entities, which were then used to embezzle millions of dollars in funds from Starkey.

Keeping all of these issues straight can be difficult and if your company is faced with any scenario remotely similar to a case like this, you should take steps to document and record every possible piece of information that could have relevance and to institute rigorous and meticulous organization of this information.

When corporate fraud of this scale is alleged and employees are fired, there will be significant amounts of filings, claims, counterclaims and potentially criminal actions. To protect your entities rights to compensation or disgorgement, you need to be planning from the first inkling a strategy and an operational plan to manage it all.

The judge refused to stay the civil matter last spring, and that case is proceeding to mediation next month. In such a circumstance, you could be forced to deal with discovery and depositions in the civil process and participate as required in the criminal case at the same time. With this many moving parts, you need great precision in all of your actions.