Insights

The California Supreme Court last week issued a decision in Siry Investments vs. Saeed Farkhondehpour that could dramatically expand the remedies available to partners or others in a commercial dispute who are victims of financial theft related to company assets and funds. Section 496(a) criminalizes the receipt of stolen property and provides for treble damages and attorney’s fees for the party suffering the loss. In a surprise opinion, the Supreme Court decided that Penal Code section 496 can apply any time there is a diversion of money or assets from a partnership, limited liability company or other business provided that the requisite criminal intent to deprive others of those funds can be shown. For the plaintiff in Siry, applying section 496 increased the outcome by many millions. The Siry decision likely will make available to plaintiffs in certain business disputes remedies of treble damages and attorney’s fees that ordinarily are not available for similar claims in other contexts.