McGonigle Law Wins $3 Million+ Arbitration Award for Cryptocurrency Entrepreneur
McGonigle Law represented the Plaintiff in a misrepresentation and wrongful termination case against Plaintiff’s former company, PeerNova, Inc. and Naveed Sherwani. The case was arbitrated to conclusion by Martin H. Dodd, Esq. under the auspices of the American Arbitration Association. Millions of dollars in damages were at stake.
The Plaintiff is a successful cryptocurrency entrepreneur and blockchain industry innovator who had founded one of the industry’s most innovative and successful Bitcoin cloudmining companies before agreeing to merge his company to form PeerNova, Inc., only to be fired from his position in the resulting company. The Plaintiff was represented by Timothy McGonigle, Esq. and Thomas Foote, Esq. of the Law Office of Timothy McGonigle, P.C.
On July 17th, 2017, McGonigle Law filed the case in Santa Clara County Superior Court, seeking damages for negligent misrepresentation and wrongful termination in violation of public policy, among other claims. The dispute was largely centered around two events: (1) promises made by defendant Naveed Sherwani which convinced the Plaintiff and others to merge their company with Sherwani’s company to form PeerNova, Inc., and (2), when the Plaintiff was unfairly terminated from his position as Vice President at PeerNova.
McGonigle Law argued that Sherwani had made certain promises leading up to the merger which were not kept, and that the termination was a breach of the Plaintiff’s employment contract with PeerNova, was retaliatory, and illegal. They further argued that their client was terminated as retaliation for using his shareholder’s voting rights to vote two directors off PeerNova’s board of directors due to differences of opinion about business strategy.
The Results of the Arbitration
After a lengthy arbitration process (conducted entirely remotely due to the pandemic), McGonigle Law was able to produce a stellar result for its client. The firm recovered $3,023,807 for the Plaintiff in monetary damages, lost earnings, emotional distress, punitive damages, and interest. In addition, an additional $485,000 was received via a pre-arbitration settlement with a co-defendant, which made the total recovery $3,508,807 for Plaintiff. The Final Arbitration Award was issued on June 15, 2021 and following a post-arbitration hearing, the full amount awarded was paid in late 2021.
It is relatively common for power struggles and conflict to occur in new blockchain startups as the industry is very new, dynamic, and volatile. In this particular case, one of the leaders of a promising cryptocurrency company was duped into voting his shares in favor of a merger, and then unfairly fired from the resulting company because of his effort to influence who sat on the company’s board, a right he was entitled to exercise without penalty under California and Delaware law because of his shareholdings and voting power.
The McGonigle firm was able to prove at arbitration that the key claims made by the Plaintiff were well founded. The victory over well-funded defendants required substantial legal skill and expertise. The Plaintiff, Mr. McGonigle, and Mr. Foote were all thrilled with the victory and that the Plaintiff would be fairly compensated for the financial losses and emotional distress that he sustained following his unfair termination from the company.
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