A Dallas-based healthcare diagnostic services provider filed a $14 million lawsuit against its former accounting firm for negligence, breach of fiduciary duty, negligent misrepresentation, fraud by nondisclosure, unjust enrichment and exemplary damages.
The former owners of Alliance Family of Companies filed the Dallas County lawsuit against Armanino LLP. The lawsuit alleges that Armanino, then called Travis Wolff & Co., offered Justin Magnuson and Don Jacobs “fully-integrated” tax, audit, and business advisory services connected to the possible sale of the company, and the former Alliance owners pulled the trigger.
During sale negotiations, the lawsuit alleges that Armanino didn’t tell the owners when it found an accounting discrepancy that could have increased the value of the company, and the lower sale resulted in $12 million in losses. The suit also says the accounting firm missed tax filing deadlines, received a $60,000 kickback for the cheaper sale, and gave poor advice about equity ownership.
“We are disappointed to learn about how Armanino’s failure to properly advise us cost millions of dollars, and hope other Dallas companies learn from the accounting firm’s mistake,” said Magnuson via release. “We are particularly disappointed because Armanino was not only charging us to do the audits but was also charging us to advise us on the sale of the company.”
Armanino has not responded to messages requesting comment.