The plaintiff, Flirty Girl Fitness Inc. (FGF), brought a summary judgment motion alleging breach of fiduciary duty, conspiracy, conversion, and professional negligence against the defendants, including a co-founder sister, former corporate lawyers, and a new fitness company.
FGF claimed damages of $180,440.15 plus punitive damages.
The defendants sought summary judgment to dismiss all claims.
The court found that the co-founder sister, Krista Knee, acted in FGF's best interests to salvage the business by transferring assets to Hottie Body Boutique Inc. (HBB), which assumed FGF's significant debts and prepaid customer contracts.
The transaction was deemed fair and beneficial to FGF, despite some corporate governance irregularities and a minor breach of fiduciary duty by the sisters for not fully disclosing future personal ownership plans to passive shareholders, which caused no damage to FGF.
The court also found no breach of fiduciary duty or professional negligence by the corporate lawyer, David Epstein.
Consequently, the court dismissed FGF's action in its entirety, concluding there was no genuine issue requiring a trial.