More than three years after default was entered against several defendants in a suit alleging they participated in an escrow scheme, Air Energy Global was awarded more than $4.3 million in damages.
Yandle issued the order granting default against defendants Napolean Grier, Napolean Grier Enterprises Inc., Susette McDaniel Harris, Benjamin Privett and Petrash Capital LLC on Nov. 16.
Yandle wrote that the defendants failed to plead or otherwise defend the suit. The court entered default against them on July 22, 2013, and September 12, 2013. Following the court’s order, Air Energy moved for default judgment.
Aaron G. Weishaar of Reinert Weishaar & Associates in St. Louis represents the plaintiff.
Air Energy filed the lawsuit in Madison County Circuit Court in 2012 before it was removed to the U.S. District Court for the Southern District of Illinois. The plaintiff alleges the defendants breached a contract, which would have enabled them to obtain financing for a business opportunity on behalf of the plaintiff.
Air Energy alleges that, pursuant to the contract, it wire-transferred a $1 million funding fee to a specified bank account. A closing agreement was to be created a couple days after the transfer and $10 million was to be made available to the plaintiff.
However, the plaintiff claims the funds were never made available, and it was unable to pursue the unspecified business deal because it did not receive the funding it had contracted for.
Air Energy also claims it never received a refund of the $1 million funding fee.
The plaintiff alleges it later learned from bank records that the funding fee was divvied up among the defendants or paid out on their behalf and at their direction.
A hearing on damages was held on January, 28 2015.
Air Energy provided a supplemental memorandum on Feb. 11, 2015, seeking a refund of the $1 million funding fee plus prejudgment interest at 7 percent per year, the $10 million in loan funding sought from Grier and NGE plus prejudgment interest at 5 percent per year, damages for loss of business opportunity, treble damages and attorney’s fees.
During the damages hearing, Air Energy President Virgil Straeter testified that the business plan intended with the $10 million earnings would have produced an estimated $127,381,000 in revenue and growth.
Further, Air Energy obtained a loan from Robert Schwarze for $1 million with an interest rate of 7 percent per annum in order to pay the funding fee.
Yandle awarded the plaintiff $1 million with prejudgment interest of 7 percent annually from Aug. 8, 2011, through the date of entry of judgment.
The plaintiff was also awarded $3 million in treble damages on its RICO claim.
However, she denied Air Energy’s request for the $10 million in loan funding sought from Grier and NGE or interest on the loan.
“The $10,000,000 represents prospective financing to have been secured for AEG which would be repaid from business revenues.
“AEG never incurred interest on the loan because it never received the loan. Further, AEG has cited no authority, and the court has located none, that would justify awarding it interest on a loan it never received.
“Therefore, awarding AEG compensation for prospective financing and interest would amount to a windfall recovery for AEG,” Yandle wrote.
As for Air Energy’s request for damages for its lost business opportunity, Yandle held that a “business must have been established before it is interrupted so that the evidence of lost profits is not speculative.”
In this case, she said damages are based on “unsupportable assumptions.”
“Because the only evidence on which to base an award for lost business opportunity is speculative at best, AEG cannot recover on this theory,” the order states.
Yandle imposed joint and several liability, holding that each defendant “had a defined role in an ongoing fraudulent enterprise that contributed to the damages incurred by AEG.”
The plaintiff was also awarded attorneys’ fees and court costs.
Prominent New York celebrity business manager Bert Padell, settled Air Energy’s claims against him for $3 million in January 2015.
Padell – an investor, business manager and career planner – serves as a senior partner of Padell, Nadell, Fine, Weinberge & Co. in New York, an accounting and business management firm for the entertainment industry. More specifically, Padell is a business planning expert, assisting clients with retirement planning, business opportunities and financial decisions.
Padell surrendered his law license in 2013.
A May 2013 voluntary resignation order out of the Supreme Court of New York’s Appellate Division states that no complaints or charges of professional misconduct were pending against him at the time. Instead, it says Padell chose to forfeit his law license because he does not practice law in New York and did not want to continue paying the registration fee.