SCOTTSDALE, AZ -- Meritage Homes Corporation, a leading U.S. homebuilder, was awarded $111 million last week, in a unanimous jury verdict in Federal District Court in Phoenix. Meritage filed the lawsuit on February 24, 2004, against Greg Hancock, a former division president of Meritage Homes. Hancock is the current owner of Phoenix homebuilder Hancock Communities.
In 2001, Hancock sold his homebuilding business to Meritage, at which time he concurrently entered into an employment agreement with the company. The jury found that Hancock breached contractual and fiduciary duties owed to Meritage and that he immediately began to commit fraud against the company by engaging in side businesses that stole corporate opportunities and goodwill belonging to the company while he was President of Meritage's Phoenix division. The jury awarded Meritage $57 million in compensatory damages and another $54 million in punitive damages against Hancock. The Court's official judgment has not been entered and it is possible that the amount of the judgment may differ from the verdict. The verdict also is subject to customary post-trial motions and appeals. Meritage is confident the verdict and judgment will stand, and intends to vigorously pursue various collection options to recover the award from Mr. Hancock; accordingly, the timing and ultimate amount of any collections cannot be predicted at this time.
Steve Hilton, chief executive officer of Meritage said, "We are pleased with the verdict which favorably addressed all nine claims asserted by the company. We believe this was a well-reasoned and thoughtful verdict after a three week trial. This is a victory for our shareholders and employees."
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