El Paso Court of Appeals Declares Open Season on New Businesses in Texas; iValue Group, Inc. Files Petition With Texas Supreme Court to Reverse El Pas

AUSTIN, Texas, Dec. 9 /- Feazell-Tighe, LLP today announced that iValue Group, Inc. has filed a petition for review with the Texas Supreme Court seeking to reverse two recent opinions by the El Paso Court of Appeals, opinions that rewrite Texas damages law to effectively preclude any tortiously destroyed new business from recovering any damages. Under the El Paso Court of Appeals's ruling, a "new and unproven" business that has been tortiously destroyed in its infancy cannot recover forward-looking damages because "any forecast of future revenues is speculative." At the same time, however, the court of appeals also declared that the same destroyed business cannot put on legally sufficient evidence to support its backward-looking start-up costs without first showing it would have generated a nonspeculative future profit, which the business - under the court's circular logic - cannot do because the business was "new and unproven."

"Those rulings essentially declare open season on newly formed businesses in Texas," says Vic Feazell, attorney for Petitioner iValue Group, Inc. "They send the message that in Texas, newly formed businesses can be destroyed with impunity, and they will have no recourse to recover any damages if the culprit who caused their destruction did so prior to the destroyed business turning a profit. This has never been the law in Texas, and we are confident the Texas Supreme Court will review this case and reverse the El Paso court. If these opinions are left to stand, they will have far-reaching consequences for damages law in Texas, as well as shareholder rights, property rights, innovation, economic development and growth," he added.

A panel of three justices from the El Paso Court of Appeals, consisting of Justices Rivera, Chew and McClure, rendered the 2 opinions, authored by Justice Rivera, following a trial in which the jury found unanimously in favor of petitioner iValue and its 80 shareholders. The defendant, M&A Technology, Inc.(M&A), a Carrollton-based computer manufacturer and hosting services provider currently run by its founder and President, Magdy Salah Elwany, was ordered to pay iValue $3 million in actual damages and $6 million in punitive damages, as well as pre- and post-judgment interest. The jury unanimously found that:

(a) M&A had committed theft;

(b) M&A had converted iValue's property;

(c) M&A breached its agreement with iValue; and

(d) M&A acted with malice (by clear and convincing evidence.)

The jury rejected all of M&A's counter-claims, and on appeal M&A did not challenge any of the findings of tortuous conduct or malice against it. Copies of the jury verdict and judgment can be found by clicking here: http://s1008981.cp.webhostmanage.com/