There’s the old adage “you don’t get something for nothing,” a concept that holds particularly true in business dealings. Yet in the business litigation case of John A. Dore, Andrew G. Chenelle, Michael O’Rourke and Michael C. Moody v. Sweports Ltd., 07 L 12136, the defendants expected to do just that. The lawsuit was filed after the defendant company took the plaintiff investors money, but then rescinded all of the plaintiffs’ stock interest.
The four plaintiffs, Dore, Chenelle, O’Rourke, and Moody, became involved in Sweports, Ltd. in 2006. Sweports, a Delaware company, was looking for investors for its subsidiary, UMF Corporation. UMF created and sold various antimicrobial cleaning products under the trademark name “PerfectClean.” Dore et al. agreed to help finance UMF in exchange for 11 percent of the company’s stock.
However, in June 2007, Sweports’s president, George Clarke, passed a corporate resolution that effectively rescinded all of Dore et al.’s stock interest in the company. This resolution was passed without any prior notice to the plaintiffs. So just a year after Dore et al. had invested around $800,000 in Sweports and UMF, they no longer owned any portion of the company. Dore et al. promptly filed a business litigation suit against Sweports, Ltd.