© 2013 The Texas Lawbook.
By Natalie Posgate
Staff Writer for The Texas Lawbook
Dallas-based Summit Alliance Financial and two of affiliates have sued their former chief financial officer for breach of fiduciary duty and contract, fraud and negligence stemming from an acquisition of the interests of two insurance companies that allegedly was a financial disaster for Summit.
But the lawyer for the CFO says he is planning to sue his former employer for money Summit owes him as an equity partner.
In a lawsuit filed last week in Dallas County District Court, Summit Alliance claims that Charles H. Spitzer misrepresented the company’s best interest when he allegedly mishandled multiple business transactions, including the acquisition of interests in two other insurance companies.
Summit, which promotes itself as one of the five largest independently owned life insurance and annuity brokerage agencies in the country, claims Spitzer’s actions caused serious financial harm to the business and its seeking between $200,000 and $1 million in damages.
Kirte Kinser, who specializes in commercial litigation and mediation at Fishman Jackson Luebker in Dallas, represents Summit. He declined to comment.
Brent Cooper, a shareholder at Cooper & Scully in Dallas, is representing Spitzer.
Cooper said his client plans to file his own lawsuit in the next few weeks against Summit for unpaid compensation the company owes him for his equity interest in Summit. Cooper said Spitzer left Summit last year “on his own terms” after a decade as its CFO to form a new company.
Summit’s lawsuit “came as a surprise,” he said.
According to Summit’s complaint, Spitzer was responsible for negotiating the price for acquiring interests in M&R Insurance Agency, LLC and Alliance Insurance Services, LLC.
Summit claims that Spitzer “breached that duty” by engaging in “cronyism and self-dealing” by “agreeing to and recommending to Summit purchase prices well above the fair market value with the intention of personally benefitting from the acquisitions,” which led Summit to “significantly overpay” and suffer a “significant financial loss.”
The lawsuit also claims Spitzer engaged in other wrongdoings, including misrepresenting the actual financial performance of the businesses, erroneously preparing and delivering tax schedules and failing to properly structure the purchase of a former partner’s ownership interest.
“Because of Spitzer’s position of trust, he was able to improperly disguise and otherwise hide his failures, such that they would not be discovered through reasonable diligence until recently,” the complaint says.
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