We've written several times about the recent legal disputes between Steven K. Fleischmann and his former partners at Washington, DC-based risk consultancy, TD International. The firm filed suit against Fleischmann claiming beach of contract and seeking to recover money they say Fleischmann pocketed by skimming business surreptitiously to a side-business, Tertuim Datur International.

The initial filings in the case have provided an interesting window into TD International's activities (Fleischmann contended that these sorts of side-ventures were common amongst the partners) and raised questions as to whether Fleischmann had ever officially signed off on his partner agreement in the first place. In late October, Fleischmann filed a counter suit against TD International principals, William Green and Ronald Slimp.

The countersuit lobs the breach of contract claims back at Green and Slimp, citing their failure to pay Fleischmann for his interest in the company when he agreed to exit the partnership in May of 2008. The suit also claims that Slimp and Green, in pursing their own third-party business ventures, failed to provide "best efforts and substantially all of their working time" to TD International, violating the terms of the partner agreement drafted back in 2004.

Fleischmann's complaint questions his level of compensation over the course of the partnership, citing numbers that would indicate his distributions from TD International were not commensurate with his position as a 1/3 partner in the business. Revenue and distribution numbers are provided in the complaint to illustrate that Fleischmann's distributions were insufficient, relative to the terms set forth in the TD International partnership agreement.

Also, intriguingly, as early as September 2004, Fleischmann contends that William Green and Ronald Slimp were operating an entity called TD Federal Services. In 2006, according to the complaint Ronald Slimp also conducted "substantial business" via TD Equity Partners. While Fleischmann states that he received some compensation from these entities, his complaint contends that these distributions were likewise insufficient.

Fleischmann is seeking damages to the tune of $4,000,000 in lost compensation and property.

No doubt, answers to these claims from TD International are forthcoming.

- MDT

Labels: Ronald Slimp, TD International Steven Fleischmann, William Green

The latest on the TD International, Steven Fleischmann dispute... A few weeks ago TDI filed an injunction requesting that Fleischmann's bank accounts be frozen - accounts allegedly containing funds siphoned off from TDI company coffers. In an August 4th Memorandum, U.S. District Court Judge Richard Leon slammed the door on the request, concluding with the following:

"TDI's sole argument with respect to irreparable harm is that it holds an 'equitable interest' in the funds it seeks to freeze. (Pl. Mot. at 5-6.) Putting aside TDI's failure to advance ant legal or factual basis to support its claim to any "equitable interest in the funds, it does not establish what irreparable harm will befall it if the Court does not grant the injunction it seeks. Indeed, the mere existence of an equitable interest in the funds is not enough on its own to warrant injunctive relief."

I think that is legalese for "Zing!"

- MDT

Labels: TD International Steven Fleischmann

An interesting note from a recent motion in ongoing the TD International lawsuit filed against the risk management firm's former partner, Steven Fleischmann...

Apparently, in January of 2009 TDI loaned Fleischmann $45,000 in response to a claim of financial distress. But Fleischmann's plea of poverty came only weeks after he received almost $300,000 via the side company Fleischmann had set up, allegedly, in order to funnel money way from TDI and into his own side accounts.

TDI is asserting via their motion that the loan made to Fleischmann is (firstly) external to and separate from any other contractual agreements and (2) that, due to Fleischmann's misrepresentations, the loan was provided under false pretenses.

So, that's a clear receipt for at least $45,000 of the $1,500,000 in damages sought by TDI. Also apparent: Fleischmann has no shame...

-- MDT

Labels: TD International Steven Fleischmann

Get Steven Fleischmann's side of the story in his Motion to Dismiss... If you need a bit of background as to why TD International might be suing one of their partners, try here and here.

-- MDT

Labels: TD International Steven Fleischmann

This new post from the Legal Times blog goes into great detail on the defense that former (or is he?) TD International partner, Steven Fleischmann plans to deploy in rebuttal to the lawsuit filed against him by his former firm.

TD International has alleged that Fleischmann diverted hundreds of thousands in company funds to an external shell company by redirecting payment for TDI invoices.

In response, Fleischmann claims that other TD partners were taking advantage of the same type of set-up, which allowed them to leverage the TD International name for their own side projects and reap the individual financial rewards.

Complicating things further - neither Fleischmann's original partnership document, nor the document that would have documented his removal from the firm circa 2008 appear to have been signed by the relevant parties...

All that and more at Legal Times... including the reaction of DC District Court Judge Richard's reaction to TD International's request that Fleishchmann's access to funds in the bank accounts for his TDI side company be frozen (looks unlikely).

--MDT

Labels: TD International Steven Fleischmann

According to the Legal Times blog, Steven Fleischmann is facing charges from his former partners at investigative and risk management consultancy TD International. A lawsuit filed against Fleischmann in U.S. District court this week on behalf of TD International alleges that Fleischmann diverted more than $1 million from the firm by manipulating company invoices.

The complaint states that Fleischmann accomplished his theft via the creation of a shell company called "Tertium Datur International" (the "TD" in TD International), setting up a bank account and even a website for the phony enterprise. By tampering with invoices and instructing clients to pay to the new Tertium Datur accounts Fleishmann was able to divert payments away from TD International projects and into his own pockets.

Again, according to the Legal Times blog, Fleishmann was confronted internally when it was appeared that certain clients hadn't paid their invoices. When Fleishmann's explanations didn't hold up, the impropriety was discovered.

Labels: TD International Steven Fleischmann