Syntax-Brillian creditors seek $300 million for damages resulting from alleged breaches of fiduciary duty

By Jennifer Lanning Drey

Portland, Ore., Dec. 1 - Syntax-Brillian Corp.'s official committee of unsecured creditors filed a lawsuit against former company directors and officers for breaching their fiduciary duties to the company, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The creditors' committee asked that Syntax-Brillian be awarded at least $300 million for damages resulting from the alleged breaches of fiduciary duties.

In the filing, the committee claimed the company's former chief executive officer and chief financial officer managed Syntax-Brillian for the benefit of its principal supplier Taiwan Kolin Co. Ltd.

The committee said the result was "massive transfers of cash out of the company without any legitimate basis or value in return."

Additionally, the committee said management's bias toward Taiwan Kolin resulted in a loan to the company that it could not possibly repay.

The committee said the nine other defendants named in the lawsuit were directors who ignored red flags showing that controls at Syntax-Brillian were inadequate and that management was not acting in accordance with its duties.

Syntax-Brillian is a Tempe, Ariz.-based designer, developer and distributor of LCD HDTVs, digital cameras and microdisplay entertainment products. The company filed for bankruptcy on July 8. Its Chapter 11 case number is 08-11407.

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