Intelligent SCM v. Roten CA2/5
ISCM, a freight forwarding company, was originally solely owned by Scott. In early 2012, in order to rescue the company’s fortunes, Scott sold membership interests in ISCM to Alex Knowles (Knowles) (48 percent), Peter Lamy (Lamy) (10 percent), and Graham Burford (Burford) (10 percent). The four members agreed that Scott would be responsible for securing the necessary legal documentation for the newly-recapitalized ISCM. Scott retained Roten, who was the managing partner of the Los Angeles office of Duane Morris, to act as ISCM’s general counsel and to provide legal services to the company and its four members. Although Roten had a history of working with Scott, he did not disclose his prior relationship with Scott to the other members of ISCM.
Without notice to the other members of the company, and at Scott’s insistence, Roten structured the company’s revised operating agreement so that it favored Scott.
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