A Houston, TX, investor who alleged that private investment firm Key Principal Partners, LLC and corporate parent Key Corp. secretly cut him out of a 2003 deal to acquire one of Hawaii’s largest lumber suppliers has won a $36.5 million jury verdict against the companies.
A Honolulu circuit court jury found late Wednesday that the Key defendants breached their fiduciary duties, intentionally interfered in investor Richard R. Foreman’s attempts to acquire Honsador Lumber Corp, and violated Hawaii’s unfair competition statute.
Foreman alleged that he and a group of investors that included Key Principal Partners, LLC formed a partnership in 2003 to buy Honsador for $28 million. According to the lawsuit, Key wrongfully withdrew from the partnership and then secretly negotiated a deal -while the Foreman group still had exclusive negotiating rights -to purchase Honsador at a substantially higher price.
The defendants’ investor group acquired Honsador in November 2004.