Court Issues $4.1 Billion Judgment to Employee Confirming Arbitration Award for Unpaid Commissions, Securities, and Punitive Damages for Fraud

SACRAMENTO, Calif., June 2 /PRNewswire/ -- Released today by Law Offices of Scot D. Bernstein, A Professional Corporation, and Law Offices of Steve A. Buchwalter, P.C.:

In what may be a record, the Los Angeles County Superior Court has issued a $4.1 billion judgment confirming a JAMS arbitration award. The defendants, including iFreedom Communications International Holdings, Limited, and its founder, Timothy Ringgenberg, were found liable for compensatory and punitive damages in an employment dispute with Paul Thomas Chester, their former Chief Marketing Officer.

Mr. Chester became the defendants' Chief Marketing Officer in June 2004. The defendants' promises to pay him certain commissions and overrides on gross revenues, his right to receive company stock, and the other elements of his compensation package reflected his experience in building marketing organizations. "When the promised compensation was not forthcoming, Mr. Chester raised the issue with his employers. By then, the employers had obtained the benefits of Mr. Chester's knowledge and expertise, and they quickly terminated him without cause," Scot Bernstein said.

Mr. Chester sought the assistance of legal counsel. Due to the lack of cooperation from his former employers, Mr. Chester was forced to file suit. The defendants, in turn, moved to compel him to arbitrate the case pursuant to an arbitration clause in the employment agreement. The plaintiff was represented by Scot Bernstein, of Law Offices of Scot D. Bernstein, A Professional Corporation (http://www.sbernsteinlaw.com/), and Steve A. Buchwalter, of Law Offices of Steve A. Buchwalter, P.C. (http://www.securitieslaw-attorney.com/). Both California law firms represent employees, consumers and investors in arbitration and litigation.

The arbitrator, a retired judge, determined that the defendants had obtained Mr. Chester's services by means of false representations and fraud. In addition to all unpaid salary, commissions, travel expense reimbursements, and compensation for unissued company stock and unreturned intellectual property, the arbitrator awarded statutory penalties, interest, attorneys' fees, and punitive damages equal to three times the compensatory damages.

"Significantly, the arbitrator held all defendants jointly and severally liable," said Mr. Buchwalter. "Mr. Ringgenberg won't be able to hide behind corporate entities that were his alter egos."

"It was the combination of the defendants' representations to their investors regarding sales revenue and their admissions regarding revenue growth rates that gave rise to the override commission figure that drove this large award," said Mr. Bernstein. "Employers should be aware that, if they make promises, they have to keep them."