Steven Malitz

Steven's Employment Litigation capabilities include:

• Obtaining injunctions against employees and competitors who breach restrictive covenants, interfere with contracts, steal trade secrets, divulge confidential information, and solicit and divert customers and employees. 
• Successfully defending companies against claims of discrimination, harassment, retaliation, and wrongful termination.  

Select Employment Litigation victories:

• Jury Trial Victory for Company in Commissions Case. Malitz successfully tried a jury case on behalf of a large printing company against a sales executive for repayment of draws exceeding his commissions and defended the company in the salesman’s counterclaim for unpaid commissions. The victory was noteworthy because, under Illinois law, compensation paid is considered earned. Malitz convinced the jury the salesman’s draws exceeded his commissions earned, and he had agreed to repay draws exceeding commissions.
• Arbitration Decision Upholding Termination of Employee. Malitz obtained a favorable arbitration award for one of the largest U.S. metals manufacturers, upholding the termination for just cause of a union employee who was reprimanded twice for using his cell phone in the plant during work hours, in violation of company policy. On one occasion, the employee contended he received permission from the shift manager to use the cell phone for the purpose of calling another manager to complain about the dangerous condition of his forklift, and on the second occasion denied using the cell phone altogether, supporting his defense with phone bills. Malitz proved knowledge of the policy, unauthorized use of the cell phone, and necessity of the penalty of termination by clear and convincing evidence.
• Successfully Defended Employer in Race and Disability Discrimination Case. Malitz defended a large metals manufacturing company in federal court in Chicago, where the employee claimed discrimination, hostile work environment, and retaliation based on disability and race, when he was terminated after an on-the-job injury limiting his physical ability. With the aim of avoiding costly litigation, Malitz conducted an investigation that revealed the employee was not fulfilling his job description, had no history of back injury or other disability, and previously had his probationary period extended because he was underperforming. Armed with these details, Malitz forced a settlement for nuisance money before any depositions were taken. Malitz has defended multiple employment cases in state, federal, and administrative courts for multiple employers.
• Successfully Defended Company Against Onerous Employment Contract Terms. Malitz defended a large Chicago electrical contractor in an employment contract case brought by a discharged employee. The employment contract—which was drafted by another law firm—prohibited the contractor from firing the employee for any grounds other than willful misconduct or gross negligence. The contract further provided if the contractor wrongfully terminated the employee, he would be entitled to his entire compensation for the multi-year term of the agreement. The contractor, and its shareholders, officers and directors, faced personal liability of $600,000 in compensation under the contract, plus treble damages and attorneys’ fees under state employment law—an uninsured financial hit that would destroy the business. Despite that the client’s employment practices liability insurance policy denied coverage for any breach of the employment agreement, Malitz persuaded the insurer to defend and indemnify the claim, then obtained a settlement from the insurer for the malpracticing attorney who drafted the employment agreement and persuaded the discharged employee to accept a low settlement.
• Successfully Defended Sex Harassment Claim and Bought Out Shareholder. Malitz defended a security consulting company facing a series of sexual harassment charges brought by a shareholder and former officer of the company in the Illinois Department of Human Rights (IDHR) and in the Illinois Department of Labor. The shareholder and officer contended she was unlawfully terminated for complaining about alleged acts of criminal activity and sexually harassing behavior, all of which allegedly occurred years before she filed her charges. In defense, Malitz and his team first demonstrated IDHR had no power to adjudicate her claims, and then countered with multiple fiduciary breaches she made in the course of her job as well as instances of poor work performance. This combination of evidence and arguments led to a settlement of her claims for retaliation, harassment, commissions, bonuses, wages and unpaid distributions, together with a repurchase of her shares. The total payout in settlement of her claims and for repurchase of her shares was nominal, given the value of the company. Malitz has handled multiple cases on behalf of companies where a shareholder has claimed a breach of an employment or shareholders agreement, and Malitz has either expelled the rogue shareholder or negotiated the purchase of the shares for a reduced price.  
• Obtained Summary Judgment for Company in Discrimination Claim. Malitz defended a large plastic bottle manufacturer facing a sexual harassment and retaliation claim filed in federal court in Chicago by the only female in its apprenticeship program. She alleged she was denied training opportunities, disciplined more frequently than males, and removed from the apprenticeship program because she was female, when she was actually removed for violating the attendance policy. She additionally alleged she was subjected to a hostile work environment and was retaliated against for complaining to management about her treatment in the program. After discovery, where Malitz debunked the employee’s claims, the district judge granted summary judgment for the company, dismissing every claim. The federal judge ruled the evidence was convincing that the employee was actually treated “more favorably, not less favorably” than male workers.

Steven's Shareholder Litigation capabilities include:

• Obtaining damages and injunctions and expelling rogue shareholders who misappropriate company assets, breach fiduciary duties, usurp corporate opportunities, and compete against the company. 
• Where partners are deadlocked or ownership rights are in question, successfully litigating and negotiating stock purchases (where the client retains the business as the sole operator) or buyouts (where the client sells his interest and pursues other opportunities).

Select Shareholder Litigation victories: 

• Expelled Rogue Shareholder for Breach of Duties. Malitz defended a home health care business in a suit by a shareholder alleging waste and seeking corporate documents. In a companion suit, the shareholder’s wife—who was a consultant and landlord of the company—sued for rent and compensation. In defending both suits, even in an absence of corporate documents, Malitz demonstrated the shareholder and his wife breached their fiduciary duties by failing to work and devote time and attention to the company, by diverting patients to a competitor, and by making unauthorized expenditures. In beating down the shareholder’s demand for an exorbitant sum for his shares, Malitz showed their valuation was unreasonable. A settlement followed where the company repurchased the shares for a minimal sum, the shareholder and his wife were barred from the company, and both suits were dismissed and all claims were released.
• Expelled Sole Shareholder, and Kept Company Office, Employees, and Assets. Malitz represented four officers of a real estate and mortgage brokerage company in a dispute with the purported sole shareholder over their stake in the company, and their ability to separate and compete. Although the officers were promised shares, the corporate documentation was lacking. Further, the officers were prevented from providing real estate and mortgage brokerage services elsewhere due to onerous restrictive covenants contained in one-sided employment agreements. As a result, the officers were working tirelessly to cultivate a business for nearly no payment or stake, and feared their departure and competition would result in suit. Malitz and his team executed a plan by which the officers shed the sole shareholder and:
  • lawfully separated from the business;
  • terminated liability from third parties and from the state for acts and transactions done in the name of the business;
  • obtained a novation of the lease through extended negotiations with the landlord and maintained the coveted office suite;
  • preserved the employees and assets of the business; and
  • continued in the practice of their profession without the sole shareholder.
• Gained Access to Stolen Business and Forced Closing on Stock Purchase. Malitz represented a prominent entrepreneur and political figure in highly contested chancery litigation against the buyer of his business that failed to pay for and close on his purchase of the business but nonetheless unilaterally took control of it. The client—through prior counsel—contracted to sell his office building and the business within it. After closing on the purchase of the building, the buyer took control of the business but failed to pay for it, and barred the seller from physical, computer, and financial access to the business. Issues involving the stock purchase, transfer of the business license, and credits for alleged defects in the building further complicated this disastrous transaction, which was now being litigated in multiple courts. Malitz then entered the cases, made demand on the buyer to immediately close on his purchase of the business, and sought an emergency injunction preventing the buyer from denying the seller access to his business pending a court-supervised closing. Realizing he could no longer stave off closing, the buyer agreed to close on the purchase of the business. In a compact period, Malitz amended the suit to cure drafting errors, ambiguities, and mechanics in the stock purchase agreement and business license transfer issues, and obtained an injunction allowing seller immediate access to the business, and substantial money damages for the stock purchase and interest pending the closing. Once the buyer closed, Malitz and his team then revised the stock sale documents to accurately reflect the agreement of the parties, counseled on and documented the complex tax ramifications and realities of a stock sale pending for two years where the buyer—to the seller’s exclusion—enjoyed the benefits of the business, and then obtained a court order requiring the recalcitrant buyer to appear in court and attend the closing in the judge’s chambers.
• Successfully Defended Suit Against Partner for Recovery of Business Assets.  Malitz defended the surviving partner in multi-venue litigation brought by the spouse of the deceased partner for recovery of partnership assets. The client and his partner started a consulting business on a handshake and successfully operated their business for many years. Upon the partner’s death, his spouse sued the client in both state and federal courts to recover the business name, intellectual property, passwords, marketing and teaching materials, client list, bank accounts, and other partnership assets, contending the client was not a partner but was merely an independent contractor. Despite tax filings showing the client received IRS forms 1099 (instead of K-1s) each year, the business name was registered to the deceased partner, only, and for recent years revenues flowed through a corporation solely owned by the deceased partner. Malitz nonetheless had the federal injunction dissolved against the client and negotiated a deal where the client paid no money to the spouse; the client list was open to solicitation by either party; the coveted teaching materials could be used by either party; the marketing materials could be used by either party; and both parties could operate independent consulting businesses.
• Successfully Defended Suit by Shareholder Against Investor for Restaurant Assets. The client invested in an existing restaurant chain owned and operated by another, and then built additional restaurants with the operator, as partners. Despite an oral agreement that the client would be a shareholder and a director in the existing restaurants, the written loan agreements and corporate documents (drafted by prior counsel) did not give such rights. When the operator refused to account as to restaurant proceeds and then secretly moved the bank accounts, Malitz and his team barred the operator from the restaurants, and then uncovered rampant mismanagement and theft of restaurant assets by the operator. Bitter litigation ensued resulting in the client assuming ownership and control of nearly all the restaurants in the chain, together with the valuable restaurant name and intellectual property.
  
   

Steven's Commercial Litigation capabilities include:

• Obtaining and collecting millions in money judgments in breach of contract and UCC cases. 
• Successfully suing for fraud when debtors and their officers, directors, and shareholders order goods while insolvent, having no intention or ability to pay. 
• Successfully suing for fraud to recover assets when debtors hobble collection efforts by transferring assets or starting successor businesses. 

Select Commercial Litigation victories:

• Obtained Rare Pre-Judgment Injunction Freezing Bank Accounts. Malitz obtained an injunction freezing $1 million in the bank accounts of a business and its attorney, when they refused to account for funds that should have been escrowed. The court later extended the injunction and ordered the turnover of the funds. The result was extraordinary because Malitz persuaded the judge to issue the injunction without requiring notice to defendants for fear they would deplete the funds, without the posting of a bond (which would have been exorbitant), and before a trial on the merits.
• In another pre-judgment attachment victory, Malitz represented a foreign manufacturer of truck accessories in a suit against a distributor that failed to pay for accessories sold to a truck manufacturer. Malitz obtained the pre-judgment attachment freezing the assets of the distributor, and then obtained a turnover order of the funds.
• Successful Fraud Suit against Telecom Carrier Despite Tariff and Bankruptcy. Malitz sued a national telecommunications carrier in Chicago when the carrier failed to initiate service, resulting in substantial losses to the business client. The carrier then went bankrupt in Delaware and moved to disallow the claim, arguing its publicly filed tariff barred the claim. Malitz then argued before the bankruptcy court that the tariff was inapplicable and could not block a claim for consumer fraud. Faced with Malitz’ threat of an onslaught of similar claims, the carrier agreed to pay the claim. The success was noteworthy because a tariff will generally prevent a claim against a utility, but Malitz creatively found a way around the tariff.
• Win in Arbitration Against Telecommunications Carrier. Malitz successfully defended a merchant bank in arbitration brought by a national telecommunications carrier for breach of contract. Despite the fact that the tariff and the contract prohibited any claim for setoff or damages by the merchant bank, Malitz persuaded the arbitration panel that the provider, by interrupting service, breached the contract and the Federal Communications and Illinois Public Utilities Acts. Malitz obtained a unanimous, zero-liability finding by the arbitration panel.
• Successfully Pierced Veil of Company Due to Fraud and Insolvency. A manufacturing company client sold metal goods to a purchaser that failed to pay and then sold its assets, leaving no proceeds to pay for the goods. Malitz sued the officers, directors, and shareholders of the debtor corporation for fraud, arguing they caused the debtor to order goods while insolvent and had no intention or ability to pay for them. Malitz forced a substantial settlement before trial despite that the debtor had no assets; the officers, directors, and shareholders of a corporation are generally not liable for the debts of the corporation; and the asset sale was commercially reasonable. Malitz has successfully litigated such fraud and breach of duty claims against shareholders, officers, and directors in state and federal courts throughout the United States.
• Shut Down Rogue Freight Forwarder Franchisee and Re-Took Territory. Malitz successfully represented an international freight forwarder against a licensee for violating an agreement prohibiting him from competing against the company in the Northern Illinois territory he had been granted. Due to the unlawful competition, Malitz obtained two separate injunctions in state court prohibiting the licensee from interfering with the company taking back the licensee’s business, and from conducting any further business under the license agreement, and as a freight forwarder. To avoid entry of the injunctions, the licensee filed for bankruptcy in Chicago. Malitz had the bankruptcy dismissed within 30 days as a “bad faith filing.” The licensee then removed the matter to federal court and Malitz had the matter remanded to state court within 24 hours.  The injunctions stood and the client had the opportunity to rebuild its business in the coveted Northern Illinois territory.
• Successfully Defended Retailer in Defamation Suit. Malitz represented a major retailer in a defamation action filed by a shopper when the asset protection associate telephoned the shopper’s employer and accused her of shoplifting. Despite the fact that two, unbiased non-parties (including another asset protection associate) corroborated the shopper’s defamation allegations, and the shopper demanded an exorbitant sum from the retailer, Malitz uncovered evidence that the shopper did indeed steal and the asset protection associate may not have been working on the day of the alleged call, leading to a minimal settlement before trial.
• Obtained Dismissals for Foreign Defendants on Procedural Technicalities. Malitz represented a California resident sued by an Illinois business for failing to pay for repair services and specially manufactured goods. Malitz successfully moved to dismiss the suit because the Illinois courts lacked jurisdiction over the California resident, which effectively forever terminated the litigation. In another such case, the client, a Maryland physician, was sued in Illinois for failing to pay for medical equipment. Malitz moved to dismiss for lack of personal jurisdiction and forum non conveniens. The judge disagreed, finding the Illinois courts indeed had jurisdiction over the Maryland physician. Undeterred, Malitz asked the judge to reverse himself. On reconsideration, the motion to dismiss was granted and the lawsuit was dismissed with prejudice. While defenses on the merits were questionable in both cases, Malitz’ use of procedural technicalities quickly and inexpensively ended both cases. Malitz has successfully defended many cases employing such technical procedures in courts throughout the nation.
• Defended Charity in UCC Case Despite Confirmation of Incorrect Sample. Malitz defended a charity in a contract case brought by a vendor of fasteners. The charity, which is in the business of assembling fan devices, provided the vendor with a sample fastener for reproduction. The vendor promised to calculate the specifications of the sample and deliver 700,000 in quantity. The vendor incorrectly calculated the specifications of the sample, but the charity approved the vendor’s incorrect specifications of the sample. When the charity rejected the fasteners upon delivery, the vendor sued the charity for the contract price. Arguing a mutual mistake between the parties as to the correct specifications of the sample fastener, Malitz moved for summary judgment and forced a nuisance settlement on the eve of trial. Malitz then persuaded the charity’s insurer to pay the settlement, despite its initial denial of coverage for such breach of contract claims.
• Enforced Judgment by Seizing Assets from Third Party Despite Bank Liens. On behalf of a substantial creditor, Malitz obtained a judgment against an insolvent debtor that already owed its banks millions and had given a blanket lien on all assets. Due to the bank liens, the debtor could pay no creditors. To repay its banks, the debtor assigned its brass molds to a third party that was using the molds to produce goods. The debtor would then distribute those goods for the third party and would earn commissions from the third party. The debtor would then pay its commissions over to the banks to pay down the loans. Having no ability to collect from the judgment debtor, Malitz seized the debtor’s molds from the third party, effectively halting production of the goods and the commissions flowing to the debtor’s banks. Although the banks were fully secured and had no obligation to pay the client, Malitz nonetheless forced the banks to share the debtor’s commissions on a monthly basis until the judgment was paid in full.
• Shuttered and Took Over Rogue Currency Exchange for License Law Violations. Malitz led a team of attorneys in achieving a significant victory in the first of a number of such suits to be filed against rogue businesses acting as currency exchanges without licensure. The firm represents many currency exchanges. On behalf of one such currency exchange, Malitz sought an emergency injunction and damages for unfair competition against a business cashing checks for a fee without a currency exchange license. The business claimed it was exempt under Illinois law because it was engaged in the business of selling tangible personal property at retail—the so-called “merchant’s exemption.” Malitz sent in an investigator and successfully proved the business was principally engaged in the business of wiring funds for a fee and, therefore, could not meet the statutory definition of a merchant. The judge agreed and granted the extraordinary injunctive relief, restraining the business from cashing checks for a fee or otherwise rendering any services requiring licensure as a currency exchange. Malitz’ tactics enabled the client to take over the rogue currency exchange.
• Defended Corporate Investigations Firm in Interference Litigation. Malitz successfully defended a corporate investigation client against a large damage claim for intentional interference with contract, assault, false imprisonment, and invasion of privacy. A consulting firm entered into a multimillion-dollar contract with a national retailer. The client was retained by the retailer to investigate one of its own corporate officers, who was suspected of accepting secret payments in exchange for entering into the consulting contract and approving large invoices for such services. After the client rendered its investigative report, the officer was removed and the consulting contract was terminated. The consultant then sued the retailer for breach of contract, and the client for intentionally interfering with the consulting contract, causing its termination. Additionally, one of the consultant’s employees sued the client for assault, false imprisonment, and invasion of privacy in connection with the investigation. The client’s insurer denied coverage due to an exclusion for intentional acts. Regardless, Malitz persuaded the insurer to pay for the client’s defense. Through extensive discovery (including the deposition of a TV personality), Malitz all but proved the client had conducted a lawful investigation and the consulting contract was justifiably terminated for reasons having nothing to do with the investigation. On the eve of trial, Malitz then forced the consulting firm to accept a small settlement and convinced the insurer to pay the entire settlement. Further, the claims for assault, false imprisonment, and invasion of privacy were dismissed, with no payout to the consultant’s employee. This victory vindicated the rights of the client, which had undoubtedly conducted a lawful investigation and fulfilled its duties under the law.
  
   

Steven's Real Estate and Condominium Litigation capabilities include:

• Obtaining rescission of real estate contracts, and damages, due to sellers’ fraud. 
• Obtaining specific performance of real estate contracts where sellers have refused to close.
• Obtaining substantial money judgments for purchasers in defects cases. 

Select Real Estate and Condominium Litigation victories:

• Obtained Cancellation of Real Estate Contract Due to Developer Fraud. Malitz represented a group of real estate investors in a contract and fraud suit with a large Chicago developer building a two-tower residential community in Las Vegas. In reliance on marketing materials and oral assurances, the clients contracted to purchase investment condominiums in the first tower at what was represented to be a significantly lower price than the units in Tower II. Upon receiving notices two years later to close—and after the deadline passed to terminate the purchase contracts—the clients learned the second tower would not be constructed and the land had been sold for a condotel, restaurant and casino. Knowing this would significantly reduce the value of their investment, the clients sought Malitz’ assistance in terminating the real estate contracts. However, the contracts plainly read that pre-contract promises from the developer were not part of the contract; the clients were purchasing one unit in only one tower; the developer had the right to build or not build at its whim; and if the clients refused to close, they would forfeit their earnest money and lose the right to purchase. Faced with a threat by Malitz to bring a class action suit for fraud, the developer agreed to terminate the clients’ real estate contracts and refund their earnest money. In obtaining this result, the clients avoided purchasing condominium units that had drastically fallen in value, and paying large mortgages, taxes, and assessments on what turned out to be poor investments.
• Enforced Rights of Purchaser to Farm and Ejected Seller. Malitz represented the purchaser of a farm in a dispute with the distressed seller, whose family had owned the farm for many years. After purchasing the farm through other counsel, the seller refused to vacate the farm, and Malitz was retained to evict the seller. The seller, who found a new purchaser who would pay a larger sum for the farm, fought the eviction claiming both he and purchaser were represented by the same attorney in the real estate transaction, without disclosure and consent, requiring rescission of the sale of the farm. When the client’s ownership of the farm was challenged by the seller, Malitz successfully tendered the matter to the title insurer. After extensive discovery (and disciplinary proceedings against the attorney who allegedly acted as an undisclosed dual agent for both seller and buyer), Malitz persuaded the title insurer to pay the seller additional sums so he would drop his claim that the sale should be canceled. The purchaser-client therefore retained the farm and realized his investment through development of the property for the sale of single-family homes. 
• Obtained Injunction Preventing Seller from Unjustifiably Terminating Deal. Malitz represented a purchaser in a multimillion-dollar commercial real estate transaction against the seller who attempted to nullify the contract for the secret purpose of selling to another buyer waiting in the wings. To justify the termination, the seller claimed the purchaser-client failed to comply with the contract by depositing earnest money in an escrow account controllable by the seller. Malitz obtained a temporary restraining order and an extension of that order, preventing the seller from terminating the contract or selling to another party. Both the temporary restraining order and the order extending it were affirmed on two separate appeals. The matter subsequently settled with the client consummating his purchase of the property.
• Forced Developer to Repurchase Defective Mansion. Malitz represented the purchasers of a fully rehabbed Victorian mansion in a fraud suit with the developer. After closing, the clients discovered numerous structural defects in their new home. Malitz sued to rescind the purchase, or, alternatively, for money damages. Despite contending the home was essentially defect-free, Malitz forced the builder to repurchase the house for the purchase price plus a premium for appreciation. The builder further agreed that if it did not timely repurchase the property, judgment would be entered against the builder and its principals for a significant sum to correct the construction defects. When the builder failed to repurchase the property, Malitz sought judgment, forcing the builder to pay the clients the substantial sum to repair the property.
• Expelled Lewd and Violent Unit Owner from Condominium. Malitz represented a condominium association in an injunction action against a unit owner who was caught performing indecent acts in the condominium and then fought with the condominium board president. Malitz persuaded the court to enter an injunction confining the defendant to his condominium, which forced him to move from the building. On the eve of the closing, Malitz then successfully opposed the unit owner’s motion for a temporary restraining order requesting the condominium issue a paid assessment letter and nullify a special assessment levied on the defendant’s unit for attorneys’ fees incurred in bringing the injunction action. The wrongdoer unit owner was forced out of the building and was required to pay all fees in connection with his expulsion. 
• Trial Victory Against Unit Owner for Slander of Title. Malitz represented a condominium association in a trial against a unit owner who unjustifiably recorded a 57-page handwritten document, entitled “Health Hazard,” against title to all 367 units in the condominium. The recording of this document killed condominium sales and refinances. In a matter of first impression, Malitz persuaded the court to order the DuPage County Recorder of Deeds to permanently expunge the document from the public record, and after trial, obtained sizable compensatory and punitive damages against the unit owner who recorded the document.