A shareholder of a Florida-based corporation has filed a lawsuit alleging severe misconduct by another shareholder, including fraudulent financial transfers and exclusion from company management. Richard V. Norat, a fifty percent shareholder in Southfire Systems, Inc., filed the complaint against John M. Meredith in the Circuit Court for the 15th Judicial Circuit in Palm Beach County, Florida on August 2, 2024.
According to the court documents, Norat accuses Meredith of usurping management authority and making unilateral decisions detrimental to both the company and Norat himself. The complaint details that Meredith acquired his shares in October 2019 and was initially expected to contribute his expertise in marketing and business development. However, since around 2020, Meredith allegedly began excluding Norat from decision-making processes within Southfire Systems.
One of the most egregious actions cited occurred in June 2024 when Meredith allegedly transferred $100,000 from the company's working capital account to his personal account without notifying or obtaining consent from Norat or other shareholders. This unauthorized transfer led to significant financial strain on the company, prompting Meredith to declare it "cash-flow poor" and subsequently cut salaries and distributions to Norat.
Norat claims that these actions not only breached Meredith's fiduciary duties but also violated Chapter 607 of the Florida Statutes which mandates that corporate officers act in good faith and in the best interest of the corporation. The plaintiff is seeking damages for breach of fiduciary duty both individually and on behalf of Southfire Systems. Additionally, Norat is demanding judicial dissolution of the company due to irreparable harm caused by ongoing deadlock between shareholders.
The case underscores significant allegations of corporate governance violations and highlights how internal conflicts can escalate into legal battles affecting both individual stakeholders and overall business operations.
Representing Richard V. Norat are attorneys Bart A. Houston and Barry G. Roderman from Houston Roderman law firm.
The Case ID is: 502024CA007322XXXAMB Div: AG.