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Digital Camera International, Ltd. v. Antebi

United States District Court, E.D. New York

July 13, 2015

DIGITAL CAMERA INTERNATIONAL, LTD, A NEW JERSEY CORPORATION Plaintiff,
v.
BARRY ANTEBI and MARLENE ANTEBI, Defendants.

          DECISION AND ORDER

          Sterling Johnson, Jr. Judge.

         Plaintiff Digital Camera International ("DCI") sued Defendant Barry Antebi ("Mr. Antebi") for breach of fiduciary duty, conversion, fraud, constructive trust, unjust enrichment, and accounting. DCI also sued Mrs. Marlene Antebi for conversion. Mr. Antebi counter-sued for minority shareholder oppression. Based on the evidence at trial, the findings of fact, the post-trial briefings, and for the reasons listed below, both parties failed to establish any of their claims.[1]

         I. BACKGROUND

         Ely Eddi, Mr. Antebi, and others started DCI, a New Jersey corporation, which sold cameras and other electronics primarily to retailers. Mr. Eddi owns 23.34%, Danny Bergman owns 33.3%, David Raanan owns 10%, and Mr. Antebi, who was in charge of day-to-day operations, owns 33%. (Trial Transcript ("Tr.") at 25). The business was in operation from late-2007 until 2011. For reasons still unclear, Mr. Antebi and Mr. Eddi had a falling out which led to Mr. Antebi's removal as an officer. DCI claims Mr. Antebi was forced out for bilking DCI. Mr. Antebi claims he was forced out through shareholder oppression.

         II. FINDINGS OF FACT

         1. Mr. Eddi was responsible for overseeing DCI. (Tr. at 26).

         2. Mr. Eddi and Mr. Bergman also operated another all-too-related company, Digital Data Devices ("DDD"). (f r. at 17-18).

         3. DDD would loan DCI money. (Tr. at 259). DCI's credit cards were under DDD's account. (Tr. at 329).

         4. Robert Moses' acted as comptroller for both DCI and DDD. (Tr. at 123).

         5. Shortly after DCI was created, Mr. Moses developed a due-to/due-from account system to keep track of personal purchases made by shareholders using company charge cards and accounts. (Tr. at 200-01).

         6. Beginning in 2007 and continuing until his termination, Mr. Antebi used corporate charge cards and accounts to make personal purchases with the full knowledge of Mr. Moses and Mr. Eddi. (Tr. at 30, 201).

         7. Other shareholders also used corporate accounts to make personal purchases.

         8. Each shareholder (and the comptroller) understood that personal purchases would be charged to each shareholder's respective due-to/due-from accounts to be repaid out of that shareholder's share of corporate profits.

         9. To facilitate such repayment and. proper accounting, shareholders were to identify personal purchases and corporate expenses on the credit card bills.

         10. Despite those identifications, DCI was never reimbursed. As of trial, shareholders had still not repaid DCI from profits or otherwise. (Tr. at 194).

         11. Mr. Antebi mislabeled some charges as corporate that should have been labeled as personal.

         12. But neither Mr. Eddi nor Mr. Moses could say with certainty which charges were mislabeled, let alone purposely mislabeled by Mr. Antebi.

         13. Mr. Moses, at Mr. Eddi's direction, changed a number of charges that Mr. Antebi marked as corporate expenses to personal purchases.

         14. Mr. Moses had no personal knowledge of any of Mr. Antebi's charges and depended wholly on Mr. Eddi's characterizations. (Tr. at 164)

         15. But Mr. Eddi could not guarantee that his characterizations of the charges were correct. (Tr. at 40-41)

         16. Mr. Antebi admits that he owes DCI for his personal purchases. He even admitted that he misidentified some personal charges as corporate and some corporate charges as personal. (Tr. at 277-83; Defendant's Ex. EE).

         17. However, Mr. Antebi could not prove which charges he mistakenly labeled as personal other than to conclusorily say as much. (Defendant's Ex. EE).

         18. Mr. Antebi purchased Yankees ticket packages using DCI funds. The tickets were eventually billed to his due-to/due-from account as personal purchases.

         19. Mr. Antebi sold his tickets for games that he could not attend, keeping the proceeds of each sale. (Tr. at 296).

         20. Despite listing the tickets as personal purchases, Mr. Eddi, Mr. Moses, and their tax accountant agreed to list the tickets as corporate expenses on tax returns so DCI could also use it as a tax deduction. (Tr. at 202).

         21. Separately, Mr. Antebi developed an idea to sell electronics in Brazil via the internet under the umbrella of a new entity, Goot.

         22. DCI did no business in Brazil and had no customers ...


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