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Courthouse Steps

By ALM Staff | Law Journal Newsletters |
September 28, 2006

CASE CAPTION: Klegg Electronics Inc. v. Nova Net Media Inc., Ken Owen, Paula Abdul and Paula Abdul Inc., L.A. Superior Court # BC357746.

CAUSES OF ACTION: Includes violation of Calif. Bus. & Prof. Code Sec. 17200 et seq.; fraud; and declaratory relief.

COMPLAINT ALLEGATIONS: In 2005, the plaintiff developed MP3 players to market and sell, and sought to raise capital. Defendant Owen claimed to have substantial contacts and experience in raising capital. In exchange for his services, Owen was to receive shares of stock. He wasn't authorized to enter into contracts on behalf of the plaintiff. At some point, Owen told Klegg that Paula Abdul agreed to promote the MP3 player and that Owen would compensate her with payment of his own shares of Klegg stock. Unbeknownst to Klegg, Owen signed a purported contract between Abdul and Klegg even though he wasn't authorized to do that. Owen then issued press releases stating that Paula Abdul had endorsed the product. He wasn't authorized to issue a press release on Klegg's behalf. Klegg found out about the contract after Abdul demanded performance of it.

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