Gladys Boles and 28 other owners of property at Hidden Valley Lakes Development sued the corporate developer, National Development Co. Inc. (NDC); NDC’s parent, Sunstates Corporation; and the individual behind both corporations, Clyde Engle, for breach of contract and fraud. The centerpiece of this development, Crystal Lake, a 30-acre recreational lake, failed to hold water; and it was determined that it could never do so. Instead of having a 30-acre lake as the centerpiece, the plaintiffs had a 30-acre hole in the ground. While the controversy over NDC’s breach of contract was pending, Engle made a “proposal” to the CEO of NDC to transfer $2.4 million in receivables to Sunstates in exchange for an unsecured promissory note. Evidence showed that all of Sunstates’ assets thereafter were transferred to Engle, making the note NDC held from Sunstates worthless. Sunstates purchased approximately $1.9 million of oriental art, antique jewelry, rare books, and other collectibles, which were maintained in Engle’s home in Illinois. Likewise, Sunstates purchased a Rolls Royce from Libco, a corporation in which Engle was the majority shareholder. This automobile also appeared to be in Engle’s possession or control. Engles regrets that the lake did not work out, a risk that the developer and the homeowners have to live with, and points out that NDC is a separate legal entity with limited liability for its shareholders. Engle asserts that he is not personally liable for damages in this case. Decide. [Boles v. National Development Co., Inc., 175 N.W.3d 226 (Tenn. App.)]

  • CreatedJune 06, 2014
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