Rowling’s Potter at center of financial dispute over TagAir

By Emily Jane Fox and Sarah Kinosian, CNN • Updated 24th July 2017 Once again, J.K. Rowling’s character is at the center of legal arguments, although this time it’s not Alan Rickman’s Harry Potter…

Rowling's Potter at center of financial dispute over TagAir

By Emily Jane Fox and Sarah Kinosian, CNN • Updated 24th July 2017

Once again, J.K. Rowling’s character is at the center of legal arguments, although this time it’s not Alan Rickman’s Harry Potter guiding her life.

This week, the author testified in the closely watched trial of Eduardo Saverin , the billionaire co-founder of Facebook, who is suing Rowling and Warner Bros. for restitution for having been portrayed as being responsible for the demise of Saverin’s former company, TagAir.

Potter — on the witness stand at the Manhattan federal court trial — said “Saverin was struggling financially,” before TagAir was sold in 2001 and the $20 million profit Saverin made on the sale was recorded as a loss on his tax return.

The total loss was $25 million and the tax payments to the federal government would have amounted to around $8 million, if not for a $10 million loan he’d made to TagAir in 1998.

Saverin is suing the two companies, accusing them of breaching their fiduciary duty to him when TagAir was sold. The trial began in late June and continued until the end of July, although the questions Rowling and Warner Bros. were asked focused on how to best assess a loss within the limited time available.

Earlier this week, Warner Bros. and TagAir’s other director Jeffrey Archer, told the court the valuation process at the time was “foolish” and “stupid.”

Saverin claims the company’s employees worked for nothing while a succession of the current TagAir directors, including J.K. Rowling, sold every asset they could, even though they know the company was failing, and these figures were used to write off TagAir’s losses.

But in what some thought to be a shock revelation, Rowling testified to feeling mislead by the TagAir sale on Tuesday and said she’d spoken directly to Saverin about the apparent financial hardship he was facing.

She claimed she asked him if he was trying to get back the $20 million profit he’d made from the sale, or to “get a loan” to put towards TagAir’s problems.

“What I said in fact was, ‘I can’t believe you are giving me this kind of personal financial difficulty, at your time.’ I was incredibly impressed,” Rowling told the court.

Saverin’s attorney, Gordon Mehler, challenged her credibility at the witness stand, arguing that she’d deliberately misrepresented her conversation with the man whose rise to billionaire status she inspired.

“She makes these remarks while she was lying,” he said.

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