Synergy Auditor Can't Escape Suit Over Co.'s $1B Fraud

Law360, New York (January 24, 2014, 5:42 PM EST) -- A New York judge on Friday shot down Holtz Rubenstein Reminick LLP's bid to quash a creditor's lawsuit that claims the auditor should have caught bankrupt food products company Synergy Brands Inc.'s $1 billion check-kiting scheme that led to the arrest of its CEO, ruling the creditor has standing to bring the action.

At a hearing in Manhattan, New York Supreme Court Judge Jeffrey K. Oing said that since plaintiff Milfam I LP, the largest unsecured creditor of Synergy, is a shareholder of the company and Holtz's audit report at issue was directed to Synergy's stockholders, the case can proceed to...

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