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COA split on whether company can repurchase stock

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A panel of Indiana Court of Appeals judges disagreed as to whether a company's attempt to exercise its option to repurchase stock had occurred in a timely manner under a shareholders' agreement.

The majority in Gatlin Plumbing & Heating Inc. v. Estate of Robert Yeager, No. 45A03-0907-CV-318, affirmed the denial of Gatlin's objection to the trial court order that directed the transfer of 63 shares of the company's capital stock held by the late Robert Yeager to his wife.

Under the shareholders' agreement for the company, Gatlin would have the option within 60 days after the death of a shareholder who isn't a decedent of Gatlin's owners or within 30 days after the appointment and qualification of an executor or administrator of the estate to purchase any or all of the stock. Robert died in October 2006; in June 2008, his widow, Musetta, filed an affidavit of entitlement saying Robert died testate but the will wasn't probated as the estate wasn't valued at more than $50,000, so the administration of the estate didn't occur. She also alleged the stock to be valued at $63,000. Musetta sought the transfer of the shares of stock to herself as trustee of two trusts. The trial court ordered the stock transferred to her.

Gatlin objected, arguing it should have had first opportunity to purchase the stock based on the shareholders' agreement. The trial court ruled against Gatlin, finding the company failed to exercise its legal rights in a timely manner.

Judges Carr Darden and James Kirsch found the shareholders' agreement didn't permit two separate opportunities for Gatlin to exercise its option to buy back its stock. They rejected the company's argument that the agreement let it exercise its second option to purchase stock after the trial court's issuance of the June 2008 order.

The majority also disagreed with Gatlin's argument that the trial court erred when it denied its objection to the order of transfer because averments within the estate's affidavit of entitlement as to the minimal value of the estate weren't supported by the evidence. When Gatlin filed its objection, it expressly asserted the amount of the estate's assets was under $50,000, wrote Judge Darden.

In addition, the company knew of Robert's death within days of it, its shareholders told Musetta in 2007 that it wouldn't buy the stock, and by the time the affidavits were filed in the estate in June 2008, the company hadn't taken any action to open an estate for purposes of asserting an interest in the stock, wrote the judge.

Judge Melissa May dissented, finding the majority's ruling would permit heirs to defeat the shareholders' agreement by delaying the opening of the estate for 60 days or more. Musetta's delay and apparent misrepresentation of the value of the estate shouldn't permit her to avoid the shareholders' agreement's provisions that say when Gatlin can purchase Robert's stock, she wrote.

Judge May would hold the company's 30-day period to exercise its option hadn't run because there hasn't yet been an appointment and qualification of an executor or administrator of the estate.

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  1. Good riddance to this dangerous activist judge

  2. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  3. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  4. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

  5. Dear Fan, let me help you correct the title to your post. "ACLU is [Left] most of the time" will render it accurate. Just google it if you doubt that I am, err, "right" about this: "By the mid-1930s, Roger Nash Baldwin had carved out a well-established reputation as America’s foremost civil libertarian. He was, at the same time, one of the nation’s leading figures in left-of-center circles. Founder and long time director of the American Civil Liberties Union, Baldwin was a firm Popular Fronter who believed that forces on the left side of the political spectrum should unite to ward off the threat posed by right-wing aggressors and to advance progressive causes. Baldwin’s expansive civil liberties perspective, coupled with his determined belief in the need for sweeping socioeconomic change, sometimes resulted in contradictory and controversial pronouncements. That made him something of a lightning rod for those who painted the ACLU with a red brush." http://www.harvardsquarelibrary.org/biographies/roger-baldwin-2/ "[George Soros underwrites the ACLU' which It supports open borders, has rushed to the defense of suspected terrorists and their abettors, and appointed former New Left terrorist Bernardine Dohrn to its Advisory Board." http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 "The creation of non-profit law firms ushered in an era of progressive public interest firms modeled after already established like the National Association for the Advancement of Colored People ("NAACP") and the American Civil Liberties Union ("ACLU") to advance progressive causes from the environmental protection to consumer advocacy." https://en.wikipedia.org/wiki/Cause_lawyering

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