Watson CPA Group Retracts Recent Statement Regarding Jani-King and James Cavanaugh In Wrongful Death Suit

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Attorneys for Jani-King International and James Cavanaugh have sent a letter to the Watson CPA Group correcting a statement made in a previous press release. The Watson CPA Group acknowledges the misleading statement.

In a recent Tax Court proceeding under Docket 30825-09 filed November 26, 2012 Colony Anne (Claire) Robinson, age 27, left Texas in November 2002 for a Thanksgiving vacation to Mr. Cavanaugh’s villa in St. Maarten along with his bodyguard and another employee of Jani-King International. Ms. Robinson did not return, and the coroner’s report showed a massive amount of cocaine in her body and ruled that as the likely cause of death.

According to Court documents, Ms. Robinson’s mother sued Mr. Cavanaugh and Jani-King for wrongful death and the parties settled on a $2.3 million deal. The company paid most of the settlement directly, and also reimbursed $250,000 to Mr. Cavanaugh for his portion. The company then claimed the entire settlement and $180,000 in legal fees as a tax deduction. The IRS and Mr. Cavanaugh settled on several other tax matters except this deduction.

In a December 6 2012 press release, the Watson CPA Group stated that James Cavanaugh was responsible for Claire Robinson's death. This was inferred from the fact that the parties settled. Since the facts of the settlement were not presented or disputed in Tax Court, only the tax deduction of the settlement payment, Mr. Cavanaugh's connection to Ms. Robinson's death cannot be substantiated. The Watson CPA Group apologizes for this inference.

Further per court records, the Board of Directors, absent Mr. Cavanaugh, had decided to settle the case rather than risk the possible reputation damage to Jani-King. The tax deduction was ultimately denied. However according to Looper Reed and McGraw PC, the Tax Court decision is on appeal with the Fifth Circuit Court.

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Tina Watson, CPA, MBA
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