Question: Richard Grassgreen was executive vice president and then president and
Richard Grassgreen was executive vice president and then president and chief operating officer of Kinder-Care, Inc., the largest proprietary provider of child care in the country. The company was restructured in 1989 and changed its name to the Enstar Group, Inc. Between 1985 and 1990, while Grassgreen served as the corporation’s investment manager, he invested millions of dollars of company money in junk bond deals with Michael Milken, and he secretly retained some $355,000 in commitment fees. When the corporation discovered this, Grassgreen repaid the corporation. It sued him to recover any compensation paid him over the five-year period during which the secret payments were made, some $5,197,663. Grassgreen defended that his conduct caused little, if any, damage to the corporation because the corporation did not lose any money on any of the investments for which he received personal fees. Decide. [Enstar Group, Inc. v. Grassgreen, 812 F. Supp. 1562 (M.D. Ala.)]
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