Jet Edge Awarded Millions in Client Theft Lawsuit

 - February 4, 2019, 12:13 PM

Global aircraft charter, management, and maintenance provider Jet Edge International has been awarded an $11.9 million verdict against a former employee on breach of contract charges, following a week-long trial in U.S. District Court. The jury in the Central District of California, Eastern Division courthouse ruled against Paul Schembari, currently CEO of Guam-based Phenix Jet, finding him liable for $4.6 million in compensatory damages and $7.3 million in punitive damages.

According to Jet Edge, in 2016 it entered into a joint-venture agreement with Tokyo-based Sojitz Corp., which specified that Schembari be hired as the JV’s assistant director of operations. Jet Edge, which is based in Van Nuys, California, alleged that position enabled Sojitz to “steal Jet Edge’s confidential information and customers.”

Sojitz launched Phenix Jet International the following year, with Schembari listed as representative director, and several of Jet Edge’s Asia-based clients soon moved to the new company. The jury ruled unanimously that Schembari intentionally interfered with aircraft management agreements between Jet Edge and third parties, breached a duty of loyalty to the company, and acted with malice, oppression, or fraud while causing harm.

A $75 million lawsuit against Sojitz is still pending in the courts.