Developer awarded $47 million in lawsuit

by Luci Scott The Arizona Republic May. 22, 2010 12:00 AM

A jury in Maricopa County Superior Court has returned a verdict of $47 million in favor of an Arizona child-care-center developer who sued an Australian company for breach of contract.

The May 14 verdict arose from a lawsuit that Arizona-based RCS Capital Development filed against Australian-based ABC Learning Centres Ltd. and its U.S. subsidiary.

ABC had been the world's largest provider of child-care centers.

ABC had agreed to buy 31 child-care centers from RCS. The lawsuit
was to recover lost profits for ABC's failure to buy them.

Representing the winner were attorneys Daryl Williams and Michael Blair, partners at Baird Williams & Greer of Phoenix.

"This will probably be one of the largest verdicts in the U.S. this year," Williams said.

With interest, the judgment is expected to reach $55 million, he said.

Rick Sodja of Paradise Valley and his sister, Cheryl Sodja of Scottsdale, are principals of RCS, under which they developed child-care centers, including Tutor Time franchises in Arizona.

After RCS signed a contract with ABC in 2008, the Australian company ran into financial trouble and fell into receivership in November of that year.

"They became the Australian equivalent of Enron," Williams said. "They were taken over by some banks, who were owed in excess of a billion dollars."

The banks and receivers told the Phoenix business they weren't going to comply with the contract. "They just decided they were going to spurn any overtures toward settlements," Williams said.

ABC Australia filed a lawsuit against RCS Capital in Nevada, seeking to recover $30 million advanced for development of child-care facilities there. Last week's verdict against ABC is likely to end that lawsuit, Williams said.

ABC's attorney David Cash of Phoenix did not return calls.


Developer awarded $47 million in lawsuit