Home New Cases IT Consulting Firm GXP Capital Seeks Damages Worth $20M From Multiple Defendants Towards Alleged Breach of Contract and Misappropriation of Trade Secrets

IT Consulting Firm GXP Capital Seeks Damages Worth $20M From Multiple Defendants Towards Alleged Breach of Contract and Misappropriation of Trade Secrets

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August 4, 2021, Southern District of California – Plaintiff Debtor GXP Capital, LLC (formerly known as Bioserv Corp.), an information technology consulting firm, brings an action against Defendants Argonaut Manufacturing Services, Inc., Telegraph Hill Partners III, L.P., and Telegraph Hill Partners III, Investment Management, LLC to recover damages worth $20 Million towards “breach of contract” and “misappropriation of trade secrets”.

As alleged in the complaint, Defendants were exploring a potential investment in Debtor, which was in Chapter 11 bankruptcy at the time. Debtor supposedly provided a large amount of confidential information, including Debtor’s trade secrets, to Defendants pursuant to NDAs, which the Defendants agreed to keep confidential. According to the complaint, the Defendants were later required to destroy all confidential information provided to them when the NDAs were terminated. However, allegedly, the Defendants breached the NDAs by “wrongfully using” confidential information and “misappropriating” Debtor’s trade secrets.

The Trustee argues that the Defendants “wrongfully interfered” with the Debtor’s ability to negotiate a Chapter 11 Plan for confirmation and took advantage of the weakness or misfortune of Debtor. Defendants “concealed” the existence of the NDAs from the official committee of unsecured creditors and “used the confidential information and trade secrets” to formulate and launch the hostile bid to gain control of Debtor. The Trustee argues that these “wrongful” acts occurred during the Debtor’s Bankruptcy Case and “tortiously interfered” with Debtor’s prospective economic advantage to reorganize Debtor in a favorable manner.

Plaintiff prays judgment against Defendants and seeks compensatory, consequential & incidental, and punitive damages along with restitution of all sums “wrongfully” obtained.

The case is In re Bioserv Corporation in the United States Bankruptcy Court for the Southern District of California and is administered under Case 21-90063-MM.

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