Patrick Willis made the Pro Bowl seven years running as a linebacker with the San Francisco 49er’s before he surprised everyone by retiring at age 30 to go join a Silicon Valley tech startup called Open Source Storage. But the teamwork that is so essential to a winning football team appears to have been lacking at the startup, as evidenced by a $2 million lawsuit Willis recently brought against the company’s founder Eren Niazi, who Willis claims enriched himself at Willis’ expense through a series of fraudulent and unauthorized actions including entering into several real estate purchase deals.
Willis’ Allegations Against His Business Partner
In the complaint filed by Willis against Niazi and EP13, one of the LLC’s Willis formed with Niazi, Willis laid out a story of Niazi having duped Willis into handing over his money to Niazi to form the LLC in what Willis believed to be a joint financial venture, only to have Niazi exclusively rely on Willis’ financial contributions to purchase properties without Willis’ consent. Willis alleged that Niazi specifically brought three properties with Willis’ money and through forging his signature.
Willis is seeking not only to be named the sole owner of the three properties, which is currently held by EP13, through a quiet title action, but also to win damages for fraud and breach of fiduciary duty. The claim of fraud is based on Willis’ allegation that, while Niazi presented himself as the successful CEO of Open Source Storage and a wise and prudent investment manager, it was all a ruse to get Willis to hand over money to Niazi to spend at his own discretion. Willis alleged that all company documents were sent to Niazi privately and so Willis was not given access to information about the company’s financials or the purchases.
The complaint also contains a breach of fiduciary claim against Niazi, arguing that, as Willis’ business partner, Niazi breached his fiduciary duties towards Willis to act in good faith and to act with loyalty, honesty, and diligence. Willis seeks $2 million in damages from Niazi in addition to the ownership of the three properties purchased by EP13.
Niazi’s Erratic Behavior
Willis claimed that he first became aware something was amiss with Niazi when Niazi began speaking about fear of government agents and snipers and made an erratic call to Willis saying, “they think I stole your money!” A month ago, Niazi was arrested for weapon charges and endangering a child and is currently being held in the San Benito Jail without bail
Help in Your Partnership Litigation Matter
Although most partnership disputes do not involve ex-NFL greats and incarcerated CEOs, the Willis case is a good reminder that, when people go into business with one another, they are placing an enormous amount of trust in one another to manage the business and their assets properly. This is especially the case when one partner is conducting much of the business’ affairs while the other partner is primarily providing capital.
At Wagenseller Law Firm in downtown Los Angeles, our attorneys have extensive experience in resolving all types of partnership litigation matters, including those related to fraud and matters involving complex real estate matters. Contact Wagenseller Law Firm today to schedule a consultation to discuss your partnership dispute.