Daughter requests liquidation of family business after allegedly finding siblings misspent company funds

By Louisiana Record reports | Jan 21, 2014

GRETNA – The daughter of a man who started a local netting and rigging manufacturer is suing her sibling with whom she inherited the company after his death for spending company funds without first consulting her.

Nancy Flores Guy filed suit against Arabi Sling and Rigging Company Inc., H.L.N. Enterprises Inc., Louis H. Flores III and Holly Flores Donnelly in the 24th Judicial District Court on Jan. 6.

Guy asserts that her father, Louis Flores Jr., founded Arabi Sling, a textile manufacturing company that makes netting and rigging products, in their backyard garage in 1972 and after he died in 2001 she and two of her siblings gained control of the business. The plaintiff alleges that she holds a 30 percent ownership interest in the business, but that H.L.N. Enterprises Inc. is an asset holding company and owns all of the business’s equipment. Guy claims that her brother Louis H. Flores II, who holds a 40 percent interest in the company, and her sister Holly Flores Donelly, who holds a 30 percent interest in the company, acted with reckless disregard and carelessness regarding her interests.

The plaintiff asserts that Arabi Sling’s total operating expenses steadily increased from $544,881 in 2009 to $715,524 in 2012 and that during that time, unbeknownst to the plaintiff, wages paid to other officers officers of the company increased from $154,701 tot $176,411 and $15,836 to $211,365. In addition, Guy claims her siblings used the company to buy tickets to professional sporting events, hotel rooms and other items.

The plaintiff alleges that after finding out about their misconduct she approached her siblings about buying her interest in the business for a fair market price of $515,700 for her part of Arabi Sling and $75,000 for her part of H.L.N., but they declined and offered her $100,000 which she rejected.

The defendant is accused of breach of fiduciary duty, unjust enrichment, wrongful termination and violation of state law.

The plaintiff has asked the court to liquidate the company to provide equitable relief with the proceeds.

Guy is represented by Preston L. Hayes of New Orleans-based Chehardy, Sherman, Ellis, Murray, Recile, Griffith, Stakelum & Hayes LLP.

The case has been assigned to Division N Judge Stephen D. Enright Jr.

Case no. 734-311.

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