Schonfeld v. Hilliard
United States Court of Appeals for the Second Circuit
218 F.3d 164 (2000)
- Written by Alex Ruskell, JD
Facts
Russ and Les Hilliard (defendants) formed International News Network and hired Reese Schonfeld (plaintiff), a former CNN president, and gave him one-third of International’s stock. In an effort to carry BBC newscasts on the network, the Hilliards orally promised to provide funds necessary to pay the BBC. The Hilliards fraudulently failed to provide the funds, and the deal fell through. Schonfeld brought an action on his own behalf and a shareholder derivative action against the Hilliards for fraud, lost profits, and lost asset value. To establish lost-profit damages, Schonfeld relied on International’s business plan; the revenues projected by a competitor’s own BBC channel; the BBC’s, Schonfeld’s, and the Hilliards’s belief that the deal would be profitable; and the reports of two damages experts. To establish lost-asset damages, Schonfeld relied entirely on the purchase price a competitor offered to air the BBC channel. The trial court found that alleged lost profits related to the deal were uncertain and granted summary judgment to the Hilliards for all but the fraud count. Schonfeld appealed.
Rule of Law
Issue
Holding and Reasoning (McLaughlin, J.)
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