Shareholder goes after former friend as suit against gallery heads
Against a backdrop of country club visits, mink coats and astrology, a disgruntled shareholder is suing a Ballwin art gallery and its owner for alleged financial mismanagement.
Deborah Harris claims former “close friend” Kristen Saverin invited Harris to invest $100,000 in Art and Accents but then turned around and used the company money for personal expenses.
In July 2005, four months after signing on as a shareholder, Harris examined bank records while Saverin was on a cruise in the Mediterranean and filed a lawsuit in St. Louis County Circuit Court, looking to recoup the her investment plus compensatory damages.
Saverin’s attorney, Albert Watkins of Kodner Watkins Muchnick Dunne & Weigley, cross-examined Harris Wednesday morning. He attempted, as he told Judge Colleen Dolan, to reveal Harris as a “sophisticated and certified financial adviser who walked into this investment with her eyes wide open” and handled company money in equally questionable ways.
Watkins showed Harris two years of the gallery’s sales receipts and tax returns that she reviewed before buying 410 shares of the company for $100,000 in February 2005. Watkins said a professional astrologer told Saverin the friends should sign the shareholder agreement on the specific date in February.
He asked Harris whether she had reviewed the gallery’s inventory of paintings before signing the agreement.
“It appeared depleted to me,” she said, but she “trusted the information from my friend” that art sales were picking up.
Harris’ $100,000 investment was then wired to two corporate accounts at US Bank and Commerce Bank. But by June, Harris said, she became “alarmed” by suspicious withdrawals from the accounts.
In response, she wrote two checks to her husband, Eugene Harris, for about $25,000, an amount she transferred into a second Commerce Bank account that Saverin could not access.
“I was worried that I would not be reimbursed for the monies I invested,” Harris said. “It was to safeguard the financial stability of the investment.”
Watkins presented bank statements from two credit cards Harris applied for and paid for with company money, but Harris insisted the cards were used only for business purposes.
She had the credit card statements sent to her home address in Ladue, she said, because she “did not want to be responsible for unauthorized charges on the card.”
Art and Accents and all its assets were eventually sold for $115,000. Harris was given $75,000 from the sale, but she said she felt “forced” to accept the sum. She said she would have preferred to freeze all $115,000 until the lawsuit progressed to trial, and “a jury could decide how the money should be distributed.”
The price of stock frequently rises and falls, Watkins said, and it is not the fault of the company or Saverin that Harris lost $25,000 on her investment.
Harris said she also wanted to be reimbursed for a $90 golf outfit she bought for Saverin with her husband’s membership account at Westwood County Club in St. Louis; a wine glass she bought for her friend while Saverin was remodeling her home; and three sheared mink coats – monogrammed with their initials – the two women charged to company accounts on a trip to New York.
Harris is represented by Dustin Deschamp and Robert Eggmann of Copeland Thomas Farris.
The case is expected to be handed to the jury by Friday afternoon.
This article was originally published in the St. Louis Daily Record, another Dolan Media publication.
Copyright 2006 Dolan Media Newswires
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