Kelemenis & Co. wins critical trial regarding the liability of the University of La Verne from its discontinuance of operations in Greece
With decision no. 7262/2008, the Athens Multi-member Court of First Instance accepted the lawsuit of “La Verne College”, the Greek vehicle through which the American University of La Verne offered its academic programmes in Greece, against the University of La Verne. The College, represented by Kelemenis & Co., requested that its corporate veil be lifted and that it be recognized by the Court that the College was only the “intermediary” legal entity that was solely managed by the University and was used by the latter fraudulently to avoid the liabilities of its establishment in Greece. The Court found that not only the corporate veil of the College, which on paper was run by employees of the branch appointed by the University (such as the secretary of the director of the program and the caretaker of the college premises) should be lifted, but also that the franchising contracts entered into by the University and the College were entirely fraudulent and were construed by the University to establish the alleged independence between the two entities in order for the University of La Verne to circumvent the liabilities of its branch. Thus, more than four years after the sudden discontinuance of the operations of the University of La Verne in Greece, the legal relationship between the two legal entities was clarified and the allegation of the University of La Verne that it had nothing to do with the local entity and that the local entity was only a client of the University collapsed. This judgment will form the basis for the continuation of the legal fight aiming at making the University pay a debt of about €7,000,000 which accumulated from the discontinuance of its operations in Greece in September 2004. It must be noted that Kelemenis & Co. has also represented the local entity in bringing criminal charges against all management and the Board of Trustees of the University of La Verne. Indeed, with decision no. 3116/2007 nine representatives of the University of La Verne have been indicted for felony fraud.