A lawsuit has been filed in King County Superior Court against TGP GP Management by SmarTek21, a technology consulting firm based in Kirkland, Washington. The company claims it was coerced into a $5.2 million acquisition of IT Avalon, a New York tech consulting firm, which was expected to generate $1 million annually but has instead led to ongoing financial difficulties.
The suit, initiated on December 18 by Totem Lake Investments II, which is led by CEO Alkarim Lalji, accuses TGP of conducting “egregiously defective due diligence.” It alleges that TGP’s principal, Ashray Prasad, ignored serious concerns raised by SmarTek21 executives regarding IT Avalon’s declining finances prior to the acquisition.
Despite assurances that acquiring IT Avalon would enhance SmarTek21’s business model, the complaint states that the acquisition has resulted in a need for continual cash infusions. SmarTek21 seeks at least $6 million in damages, in addition to punitive damages and other forms of relief. TGP has publicly refuted the allegations, asserting that their due diligence process was thorough.