The Federal Court has found Adelaide lawyer Jason Demetrios Karas engaged in a “dishonest and fraudulent design” to secretly establish a global legal venture, ordering him to pay more than $56 million to his former business partner, Scipio “Skip” Lipman, and their firm, LK Law.
Justice Patrick O’Sullivan ruled that Karas must pay $27.5 million in equitable compensation to LK Law and $13.75 million to Lipman, with the firm also entitled to $15.6 million in profits representing benefits received by UK firm Mishcon de Reya (MdR).
The judgment centres on Karas’ concealed negotiations with MdR, which the court found were designed to transition LK Law’s Hong Kong revenue stream to the UK firm while positioning himself as “the sole legal and beneficial owner” after separating from Lipman.
Justice O’Sullivan said the concealment denied Lipman and LK Law the ability to “protect or otherwise deal with the assets” involved, finding the conduct a clear breach of fiduciary duties.
Karas and Lipman co-founded LK Law in 2004 and expanded into Hong Kong, operating Karas Lawyers (LKHK) as an integrated branch by 2012. However, their relationship deteriorated by 2018.
Despite signing a Separation Agreement effective June 1, 2021, the court found Karas had secretly devised a strategy to break away and integrate his interests with MdR.
“This was no minor or inadvertent breach,” Justice O’Sullivan said, adding that Karas’ actions were misleading and deceptive.
“As to MdR, there is no doubt Mr Karas engaged in a dishonest and fraudulent design.”
The matter will return to court.
Source: The Advertiser.
