August 30, 2021, Southern District of New York – Plaintiff Trustee Albert Togut of the estate of Debtor Chowaiki & Co. Fine Art Ltd., files a lawsuit seeking damages for breach of fiduciary duties owed to the Debtor and its creditors by Defendant David Dangoor. The complaint allegedly seeks to redress the harm caused to the Debtor, the Debtor’s bankruptcy estate, and its creditors by Dangoor, the majority and controlling equity owner of the Debtor.
As alleged in the complaint, Dangoor occupied a position of managerial control over the Debtor’s financial affairs and allegedly failed to sufficiently capitalize the Debtor by failing to monitor and stop the Debtor’s financial expenditures in the various projects. As contended by the Trustee, Dangoor materially breached his fiduciary duties by failing to act in the best interests of the Debtor as a reasonably prudent person in the same position would have done under the circumstances. The Trustee further alleges that Dangoor did not take reasonable steps necessary to preserve and protect the Debtor’s going concern value. The Trustee specifically argues that the Dangoor knew or should have known that the Debtor’s expenditures of millions of dollars into certain projects would erode the Debtor’s already declining going concern value with no corresponding benefit to the Debtor, and impair the Debtor’s ability to address its obligations to its creditors and third-party consignors.
The case is In re Chowaiki & Co. Fine Art Ltd, Case No. 17-13228 (LGB). The law firm of Togut, Segal & Segal LLP is representing the Trustee in the Debtor’s bankruptcy case.