Edward S. Denn v. John O. Anderson and Wendy Anderson
Published: Dec. 5, 1998 | Result Date: Jun. 29, 1998 | Filing Date: Jan. 1, 1900 |Case number: 962327379SEA Verdict – $274,337
Judge
Court
King Superior
Attorneys
Plaintiff
Defendant
Facts
Plaintiff Edward S. Denn and defendants John and Wendy Anderson were 50/50 shareholders in a closely held corporation and parties to a Shareholders Agreement containing a "Shot Gun" provision which permitted a shareholder, in the event of impasse, to offer for sale all of the initiating party's stock at a purchase price determined by the initiating shareholder. If the party receiving the offer declined to purchase, then the declining party was obligated to sell his stock to the initiating shareholder at the same price. The plaintiff notified the defendant he would sell his stock to defendant for $200,000 and his release from corporate obligations he personally guaranteed. The plaintiff's offer fixed the price at the outstanding balance due in connection with defendant's initial stock purchase from plaintiff so that if the transaction reversed and plaintiff was required to purchase defendant's stock, the purchase price would be no greater than the amount of indebtedness which plaintiff could then cancel. Thus, if defendant failed to purchase plaintiff's stock, plaintiff would acquire defendant's stock worth $450,000 for a cancellation of the $200,000 indebtedness. The defendant accepted the offer and raised sufficient funds to accomplish the purchase and pay off the original acquisition note. The plaintiff, who also owned the building occupied by the corporation, demanded a new lease substantially in favor of the landlord (in contrast to the existing lease) and other conditions including his release from all guarantees undertaken since inception of the company. The defendant procured releases from the majority of guarantors identified as such, or made other arrangements to protect the plaintiff. On the date of closing, there were unresolved issues regarding the transfer of the franchise, the elimination of certain guarantees and the absence of a satisfactory lease arrangement. The plaintiff thereupon fired defendant, locked him out of the business and excluded defendant from the exercise of any right as a shareholder, officer, employee or director. The plaintiff brought this action against the defendants based on breach of contract theories of recovery.
Settlement Discussions
The plaintiff made a settlement demand for $45,000. The defendants made an offer of $55,000.
Other Information
The verdict was reached approximately 1+ years after the case was filed. MEDIATION: A mediation was conducted on April 9, 1998, by JAMS resulting in an offer by plaintiff to pay defendant $45,000, which offer was later withdrawn.
Length
four days
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