When Elkind and Bennett were partners, they hired attorney Richard J. Cahan to devise a way to hide their various assets through a series of complex corporate transactions, Elkind notes in a lawsuit filed earlier this month in a Florida court. The scheme, Elkind contends, allowed him and Bennett to avoid taxes, but gave Bennett an opportunity to prevent Elkind from maintaining his share of ownership in Breaker Assets Holdings, AVV and half of Net Management Services Inc.
The suit claims that Cahan, who was supposed to represent both Elkind and Bennett, disregarded his duties to Elkind and assisted Bennett in defrauding Elkind. Elkind is seeking unspecified damages from Cahan.
Elkind claims that Cahan then began working with Bennett to get Elkind out of the picture. He said in the suit that Netvision Audiotext Inc., which he and Bennett jointly owned, was sold to Virtual World Holdings for more than $14.8 million. Virtual World Holdings, which is under the umbrella of Breaker Assets Holdings, was supposed to pay $319,688 each quarter, but hasn't paid since January 2002, the suit states.
The suit states that Bennett and Elkind had planned to set up an offshore account for tax-avoidance purposes, and that Elkind was required to sign an employment agreement, which he said was not needed because he was 50 percent owner in the company.
Elkind also claims that Bennett and Cahan brought two of his other personal attorneys, Steven Workman and Kenneth Knox, into the scheme to exclude him from the business.
In the suit, Elkind claims that, in 2004, the attorneys used personal information from other matters in which they represented him and knowingly worked under conflicts of interest to plot with Bennett to force Elkind to sell Bennett his share of the business for a fraction of its worth.
Efforts to reach Cahan for comment were unsuccessful.
No trial date has been set.