Pietro Denevi, a former high-school football coach, had dreamed for years of transforming a 210-acre parcel of land in Los Gatos, California, into a championship golf course. He negotiated with the owner to buy the land and then turned to Barry Swenson, a prominent Silicon Valley real estate developer, to provide $750,000 in return for an equity interest in the project.
But when the time came to fund the transaction, Swenson didn’t provide the money, and the seller sold the property to another buyer.
We sued Swenson for breach of his fiduciary duty to Denevi. Swenson claimed that the limited liability corporation he had established protected him from personal liability. We proved in court that Swenson never intended to fund the transaction. He intended to buy the property himself and develop it on his own, so that he would not have to share any proceeds with Denevi. His scheme failed because the seller sold the property to someone else.
After a four-week trial, the court agreed that Swenson had abused Denevi’s trust and that his corporation did not protect him from liability. Denevi was awarded $10 million.