Bart Snell was the Chief Financial Officer (CFO) and a board member of Mike's Flooring Companies, Inc. (MFC), which was a family-owned business selling and installing flooring and tile on the East Coast. When MFC faced financial difficulties in 2017 and 2018, Snell negotiated a deal to sell most of the company's assets to another company for $13 million, with some debts forgiven by the bank. After sealing the deal, Snell resigned and claimed a $2 million incentive compensation, which MFC refused to pay. Snell took the matter to arbitration and won almost $1.8 million.
Meanwhile, the remaining directors of MFC, who were family members, voted to dissolve the company and distributed its assets among themselves, claiming they were canceling loans they had made to MFC. These assets included cash, insurance policies, a debt owed to MFC, and some vehicles, totaling over $1.3 million. Snell sued them, alleging violations of corporate laws and fraudulent transfers.
After a trial, a jury found the directors and shareholders responsible for violating laws regarding distributions from an insolvent corporation. The court also ruled the transfers fraudulent and ordered the return of assets from the family's holding company, as well as money judgments against the family members for assets they sold or encumbered while the lawsuit was ongoing. Additionally, the court imposed attorney's fees as a penalty against the holding company.