Case Background

Rahul Mewawalla, a seasoned executive with experience in technology and media, joined Freedom Mortgage Corporation in 2020. He accepted a high-level role to lead a new technology initiative. The initiative, later named Xpanse, was presented as a strategic venture backed by the financial strength of Freedom Mortgage. Mewawalla engaged in extensive discussions with Stanley Middleman, who led Freedom Mortgage and related entities. They discussed forming a new, independent tech company with Mewawalla as CEO and co-founder.

Cause

Mewawalla claimed he accepted the role based on specific promises. Stanley Middleman allegedly assured him that Freedom Mortgage would inject substantial assets, revenues, and technology into the new venture. The company would be a Delaware C-Corporation, enabling clear equity allocation. Mewawalla was promised a 5% equity stake, a $1 million signing bonus, and a $1.5 million salary. He began leading Xpanse after its incorporation on May 27, 2020. Despite these assurances, the defendants allegedly failed to transfer his employment formally to Xpanse, failed to issue the promised equity, and ultimately disregarded the agreed terms.

Injury