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Office of Strategic Services, Inc. v. Sadeghian

United States District Court, E.D. Virginia, Alexandria Division

February 4, 2015

OFFICE OF STRATEGIC SERVICES, INC., Plaintiff,
v.
STEVEN SADEGHIAN, et al., Defendants.

ORDER

CLAUDE M. HILTON, District Judge.

THIS MATTER comes before the Court on the Proposed Findings of Fact and Recommendations of the Magistrate Judge regarding the dissolution of U.S. Smoke and Fire Curtain, LLC ("Curtain").

An evidentiary hearing was held before the Magistrate Judge on October 2, 2014 and his Proposed Findings of Fact and Recommendations were issued on October 22, 2014.

The Magistrate Judge recommended the final accounting of Curtain proceed as follows:

a) CYSA Development Management Corp.'s ("CYSA's") distribution: $104, 701.04;
b) Office of Strategic Services, Inc.'s ("OSS's") distribution: $110, 399.04;
c) Any monies received from Spilker Door, Inc. ("Spilker") be distributed 51 percent to CYSA and 49 percent to OSS;
d) Any net recovery from Curtain's pending lawsuit against Bradley Lomas Electrolok Limited ("BLE") be distributed 51 percent to CYSA and 49 percent to OSS;
e) The "Elevator Shield" trademark be assigned to OSS, and OSS be ordered to provide CYSA a non-assignable, royalty-free license to use the trademark; and
f) Attorney's fees and costs be considered once a request has been presented.

OSS objects to the Magistrate Judge's recommendation that any net recovery received from Curtain's pending lawsuit against BLE be distributed based on ownership percentage, arguing a) the faithless servant doctrine bars Defendants from any recovery from BLE; and b) Curtain's claim should be assigned to OSS in order to ensure it will be pursued by an entity that survives the dissolution of Curtain.[1]

Defendants object to the Magistrate Judge's allocation of an additional $5, 000 to OSS in order to account for funds improperly drawn from Curtain by CYSA in 2012. Defendants also object to the Magistrate Judge's disposition of the "Elevator Shield" trademark, arguing Virginia dissolution law "does not allow the court to distribute an asset to one member in one capacity, and then to another member in a different, inferior and limited capacity."

Based on a de novo review of the evidence in this case and the parties' objections, it appears to the Court that the Proposed Findings of Fact and Recommendations are neither clearly erroneous nor contrary to law, and should be affirmed and adopted by the Court. It is hereby

ORDERED that CYSA receive $104, 701.04 of Curtain's hard assets; OSS receive $110, 399.04 of Curtain's hard assets; any payments received from Spilker be distributed 51 percent to CYSA and 49 percent to OSS; any net recovery from Curtain's pending lawsuit against BLE be distributed 51 percent to CYSA and 49 percent to OSS; the "Elevator Shield" trademark be assigned to OSS; and OSS is ordered to provide CYSA a non-assignable, royalty-free license to use the "Elevator Shield" trademark.

Attorney fees and costs will be considered by this Court if and when they are requested.


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