Boca Raton suing Colorado attorney for alleged negligence in bids to buy shell companies

By Elizabeth Alt | May 24, 2018

On May 21, a Boca Raton man filed a suit in U.S. District Court for the Southern District of Florida against a Colorado attorney alleging breach of contract after the attorney accepted over $100,000 to purchase shell companies that allegedly were not available.

On May 21, a Boca Raton man filed a suit in U.S. District Court for the Southern District of Florida against a Colorado attorney alleging breach of contract after the attorney accepted over $100,000 to purchase shell companies that allegedly were not available. 

Gali Kanfi filed a suit against attorney William Thomas O’Connell Hart III for breach of contract and breach of duty for wiring money to shell corporations before Kanfi received the securities.

Kanfi's filing said he hired Hart for legal services to assist him in buying a public shell which is “a publicly-traded company with no operations” in 2017. Kanfi executed an agreement for Hart to become his escrow agent when he found a shell called Portage Resources Inc. The complaint states that despite requests, Hart has not provided Kanfi with a copy of the escrow agreement.

When that deal fell through, the filing said Kanfi attempted to buy Alternaturals Inc. that included a “convertible promissory note issued by Alternaturals in favor of a company called Business Direct Inc., purportedly controlled by a person named Stuart Fulbrook.” The purchase also included 50 million shares of Alternaturals stock that were supposedly owned by a Matthew Briggs. Kanfi was to pay Business Direct in exchange for the note. 

The agreement stated that the funds would remain in escrow until closing or on or before July 21, 2017. Kanfi claims he wired a total of $50,000 for the debt purchase agreement, $50,000 for the stock purchase and $5,000 for legal fees. 

Kanfi states that JPMorgan Chase Bank said the account to which Kanfi wired money for Hart was in the name of Water Damage LLC. A footnote of the complaint states that the counsel for Kanfi “has searched for Hart Hart LLC and Hart & Hart LLC but has found no such entities in Colorado.” 

The complaint alleges that “at the time of the transaction for which defendant was conducting due diligence and acting as escrow agent, Alternaturals did not exist as a legal entity. … Mr. Briggs … failed to deliver any shares of stock to defendant to hold in escrow or to Mr. Kanfi. …The note was never assigned to Mr. Kanfi.”

The filing claims Business Direct Inc. dissolved in 2010 and that Alternaturals had its license revoked and reinstated shortly after the closing was supposed to occur. Hart wired money to six different entities, none of which were Briggs, Business Direct, or Fulbrook. The complaint also states that when Hart sent documents for the transfer of Alternaturals ownership to Kanfi, Hart was told Briggs had not been an officer and director of Alternaturals since his 2015 resignation and the parties knew nothing of the transaction that would transfer ownership to Kanfi.

Kanfi alleges that Hart “breached his duty of reasonable care to plaintiff by failing to conduct the necessary due diligence into ANAS (the ticker symbol for Alternaturals) and for prematurely releasing plaintiff’s funds from escrow,” causing Kanfi to incur “damages in the amount of $105,000.”

Kanfi has requested a trial by jury.

U.S. District Court for the Southern District of Florida, Case Number 9:18-cv-80666-DMM

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