Stewart Appelrouth’s Forensic Accounting Determines Plaintiff’s $2.4 Million Award in Damages for A-Data Taiwan’s Breach of Joint Venture Agreement

MIAMI -- (BUSINESS WIRE) -- A-Data Technology Co., Ltd. (A-Data Taiwan), the world's second largest vendor of memory modules, was ordered to pay $2.4 million to A-Data Technology Latin America, LLC (A-Data Latin America), its counterpart in a joint venture, for breaching their operating agreement.

In June, 2004, Samar Shah and Juan Ortiz, who were employees of Bell Microproducts, wanted to go into business to take advantage of the emerging Latin American market for Taiwan's memory module products. They proposed to partner with A-Data Taiwan to begin their venture. The terms of the joint venture agreement were negotiated by Mr. Shah and Mr. Ortiz with Mr. and Ms. Chen and Kevin Kao, officers and employees of A-Data Taiwan.

A-Data Taiwan chose to use its U.S. subsidiary A-Data Technology U.S.A. Co., Ltd. (A-Data U.S.) as its representative in the joint venture, but A-Data U.S. had no part or involvement in the joint venture discussions and negotiations. A-Data Taiwan’s personnel negotiated the deal solely for its benefit, since the joint venture agreement required A-Data U.S. to give up its Latin American customers to A-Data Latin America.

The purpose of the venture was to market, sell, and distribute flash products manufactured by A-Data Taiwan throughout the Miami broker market, Latin America, and the Caribbean. Once the joint venture was agreed upon, A-Data Latin America was formed to engage the Latin American Market. Based on the information obtained during discovery, the Latin American sales under the joint venture agreement totaled at over $18 million from July 2005 to July 2006.

The original complaint claimed that A-Data Taiwan breached their joint venture agreement with A-Data Latin America by failing to transition their Latin American business to A-Data Latin America. The complaint also alleged that they failed to develop a new customer base and failed to negotiate pricing for the memory modules they were selling. A-Data Taiwan’s actions ultimately hindered A-Data Latin America's ability to properly sell the memory module products and effectively compete in the market.

Stewart Appelrouth, a partner with the accounting firm of Appelrouth Farah & Co., was hired by the A-Data Latin America’s attorneys to carry out a forensic accounting analysis and calculate the damages as a result of A-Data Taiwan’s breach of the joint venture.

Through his forensic accounting, analysis and calculations, Mr. Appelrouth determined that the commission income under the joint venture agreement due to A-Data Latin America for sales to Bell made from June 26, 2006, through July 21, 2006 was $56,119.15 and $279,989 for the 1.5% commission of the $18 million in Latin American Sales from July 2005 and July 2006. His forensic accounting analysis concluded that A-Data Latin America’s value was estimated at $2,091,000.

On January 11, 2010, Hebert Stettin, the arbitrator overseeing the case and member of the American Arbitration Association, determined that A-Data Taiwan had in fact breached the joint venture agreement and awarded the plaintiffs $2.4 million in damages based on Mr. Appelrouth’s forensic accounting, analysis and calculations.

About: Stewart Appelrouth co-founded Appelrouth, Farah & Co., where he has developed a reputation as one of the most creative financial and accounting advisors in South Florida. Appelrouth's hands-on, direct approach to financial challenges has provided his clients with solutions to seemingly insurmountable problems. His accounting experience includes over 25 years of providing specialized services such as litigation support, auditing, fraud investigation, receiverships and business valuation services as well as, business and tax consulting. Mr. Appelrouth received his Bachelor of Science degree from Florida State University, Master's degree from Florida International University and is a Certified Public Accountant, Certified Fraud Examiner, Certified Valuation Analyst, Certified Family Law Mediator, Certified in Financial Forensics, Certified Personal Financial Specialist and a Diplomate of the American Board of Forensic Accounting. For more information please visit http://www.appelrouth.com/litigation.asp