Plaintiff v. Capital Circuits

The Plaintiff corporation sold its wholly owned subsidiary, which manufactured circuit boards to a group of investors. The Plaintiff received a cash down payment and took back a one million dollar note secured by the assets of the business, but subordinate to a primary lender. The buyer defaulted and then sold its interest in the company to a vulture investor group, who immediately threatened bankruptcy to force the seller to forgive most of the debt. Keith L. Miller brought an action in Suffolk Superior Court, and obtained an injunction preventing the borrower from transferring assets of the company to third parties. An investigation by Attorney Miller uncovered that the new owners had taken an ownership interest in the primary lender to the defaulting company. When this information was disclosed, the new buyers elected to settle, resulting in a pay out over time of nearly $1 million to the seller.