BY ELINOR J. BRECHER
A Circuit Court jury in Miami decided on Monday that the accounting firm BDO Seidman should pay the late philanthropist/aviation pioneer George Batchelor’s estate and foundation $91 million for “fraudulently” concealing false information about a company in which Batchelor had invested.
The award consists of $55 million in punitive and $36 million in compensatory damages.
Steven Thomas of the Venice, Calif., firm Thomas, Alexander & Forrester, is lead Batchelor attorney. He said he thought that the punitive damage award was so hefty because “BDO, right up to the end, denied it had a public duty — and public is literally their middle name: CPA.”
A lawsuit filed in 2002 — the year that Batchelor died at age 81 — alleged that BDO Seidman covered up erroneous financial statements during an audit of Grand Court Lifestyles, a Boca Raton owner/manager of “senior” communities. Batchelor had invested in Grand Court, which filed for bankruptcy in 2000.
The jury decided that BDO owed the estate $34.4 million and the foundation $2.3 million in compensatory damages.
Thomas said that the entire award “goes into the Foundation, which means dozens of
organizations in Miami that are funded by the Foundation may be getting additional monies.”
Batchelor, who founded Arrow Air and Batch Air, had given an estimated $100 million to South Florida causes that benefited children, animals, the environment and medical facilities before he died. The foundation continues supporting many of those charities.
In a written statement, the accounting firm said it “strongly” disagreed with the verdict and planned to appeal.
BDO is “confident the verdict will be reversed on appeal as there were numerous reversible errors made by the court during this trial,” the statement said.
Thomas, who has successfully sued BDO in the past, countered in a statement that, “This case was especially egregious, since the client went opinion shopping until it found an auditing firm that was willing to look the other way when it came to performing its public duty. That firm was BDO Seidman.”
Grand Court hired BDO after dropping another accounting firm that had questioned how it valued certain properties, the suit said.
BDO said Batchelor couldn’t have relied on BDO’s May 3, 1999, audit opinion of Grand Court because he’d made the bulk of his investments before that date.
Deloitte & Touche, the original accounting firm, has settled with the Batchelor Foundation.
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