Attempted Shareholder Squeeze-Out Nets $4.59 Million for Plaintiffs
After being forced out of the family lumber supply business by the controlling shareholder, the plaintiffs filed litigation under the business oppression statutes and for wrongful discharge. The plaintiffs had worked for Self Serve Lumber for several decades, and they collectively owned a minority, non-controlling interest in the company. Over the course of several months, the controlling shareholder terminated each of the plaintiffs from their long-held positions of employment, eliminated all of their benefits, removed them from the board of directors, and was attempting to force the sale of the plaintiffs' shares at a subpar price.
Alleging that the defendant's course of conduct constituted a shareholder squeeze-out, the plaintiffs filed claims for violations of the shareholder and member oppression statutes, breach of fiduciary duty, and breach of lifetime employment contracts. The principal remedies sought by the plaintiffs were a court-ordered buy-out of their shares and damages, or, alternatively, the appointment of a receiver and the dissolution and liquidation of the business.
After early and intense discovery, and forensic investigation and analysis of the businesses' finances, the parties engaged in a two day facilitation process which culminated in a $4.59 million settlement in favor of the plaintiffs.
Type of Action: Shareholder and Member Oppression, Breach of Fiduciary Duty, Breach of Lifetime Employment Contract
Type of Damages: Value of Shareholding and Member Interests; Oppression; Wrongful Discharge
Name of Case: Schwannecke, et al. v. Schwannecke, et al.
Court / Case No./Date: Saginaw County Circuit Court; 2012-15139-CK-2; July 19, 2012
Name of Judge: Hon. Robert L. Kaczmarek
Settlement Amount: $4,590,000
Attorneys for Plaintiffs: Gerard V. Mantese
Attorneys for Defendants: Withheld
Expert Witness: Jesse A. Ultz, Stout Risius Ross
Facilitator: Edward H. Pappas, Esq.