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'Real Housewives' Taylor Armstrong Sued with Husband for $1.5M

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By Cynthia Hsu, Esq. on August 02, 2011 1:19 PM

Real Housewives of Beverly Hills' soon-to-be divorced couple Russell and Taylor Armstrong are being sued for $1.5 million for allegedly misleading investors.

Russell, a venture capitalist, held a stake in a medical records company called MyMedicalRecords.com (or MMR). He allegedly misled investors by selling them shares of another company, NuWay Digital Systems (NDS) and telling them that they would get a share of MMR - but instead kept the money for himself and his wife.

The Armstrongs then used these funds to redecorate their mansion and fund part of a restaurant with Desperate Housewives star Eva Longoria, reports NBC Connecticut.

The lawsuit comes at a precarious time in their marriage as well. Taylor Armstrong recently filed for divorce from her husband, citing instances where he physically abused her during arguments.

The suit claims that as Russell was a part-owner of MMR, he breached his fiduciary duties to the company. Generally, breaches of fiduciary duty can occur if the owner or partner of a company decides to not act in the best interest of the company and instead enriches themselves.

And, Taylor could be liable even if they are divorcing because they were married during the time that Russell was allegedly misleading the investors. Debts incurred before marriage are usually only held against the spouse that incurred the debt. But, in many community property states - in which California is one - debts incurred during marriage can be held against both spouses, even if one of the spouses did not incur the debt.

Though of course, one only wonders if Taylor knew about Russell's alleged misdeeds before the suit was filed. But, it seems likely that now that Russell and Taylor Armstrong have been sued, the not-so-happy couple will only have more to discuss as they proceed through the divorce process.

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