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Court rules for widow in Holiday World suit

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The widow and children of the late William Koch Jr. can keep their shares in the southern Indiana theme park, Holiday World and Splashin’ Safari, after a ruling by the Indiana Court of Appeals concluded that William’s brother, Dan Koch, and Koch Development Corp. offered too little money for the shares.

In Koch Development Corporation and Daniel L. Koch v. Lori A. Koch, as personal representative of the Estate of William A. Koch, Jr., deceased, 82A04-1212-PL-612, the COA affirmed the Vanderburgh Circuit Court’s judgment against Dan and KDC. The lower court held that Lori Koch was the owner of 49,611.6 shares of KDC stock and because Dan and KDC materially breached the shareholders’ agreement, she did not have to sell the shares to KDC and Dan.

Writing for the court, Judge Paul Mathias acknowledged the pain the family fight has caused.

“While we regret seeing a family divide itself over an internal business dispute, our role is to determine whether the trial court’s findings were supported by sufficient evidence and whether these findings support the trial court’s judgment,” Mathias wrote. “Here, the evidence favorable to the trial court’s decision supports the trial court’s conclusion that Dan and KDC materially breached the terms of the Agreement and that this material breach excused the Estate of its obligation to perform under the Agreement.”

The dispute erupted after Will Koch died unexpectedly in June 2010 and Dan Koch, who had been an attorney in Florida, became the president of KDC, the owner and operator of the amusement park.

Under terms of the Share Purchase and Security Agreement executed in 2002, Will, Dan and their sister, Natalie, dictated that upon the death of any shareholder, KDC would purchase all the shares of common stock owned by the decedent.

In December 2010, KDC and Dan offered to purchase Will’s shares from the estate for $26.9 million, based on the value of $541.93 per share. The estate rejected the offer claiming the shares were worth $653.07 each, putting the total purchase price at $32.1 million.

Before the COA, Dan argued that despite the minutes from a July 2009 shareholders’ meeting that valued the stock at $653.07 per share, the shareholders did not agree to that price. He claimed the trial court erred by excluding testimony from Natalie and himself that would have supported his contention.

The appellate court found the trial court properly rejected the testimony since Natalie “was a sufficiently interested party with interests adverse to those of the Estate.” In particular, she had acknowledged that she was worried if Dan lost control of KDC, he might not be able to repay her the more than $10 million he still owed for shares he previously had purchased from her.

Both the trial court and COA highlighted that neither Dan nor KDC made any effort to correct their initial offer within the 180-day limit imposed by the agreement. Dan asserted the time provision in the agreement was “boilerplate” language.

Again, the COA rejected Dan’s argument. It held that because the shares’ value could fluctuate significantly, the decedent’s shares should be purchased in a short period of time.

In upholding the trial court’s finding that Dan and KDC materially breached the terms of the agreement, the judges dismissed, in particular, Dan’s assertions that he would suffer forfeiture if the estate was allowed to keep Will’s shares and that he did not have enough time to fix the situation.

The COA noted that the agreement does not give Dan the right to run the family business, only the opportunity to purchase the shares of the decedent. As to Dan’s claim he needed more time, the court pointed out that instead of making any effort to adhere to the terms of the agreement, Dan and KDC “stubbornly stood by their initial, low-ball offers.”

Finally, the judges concluded there is ample evidence that Dan and KDC did not act in good faith. Specifically, it found that Dan planned to increase his salary to somewhere between $875,000 to $1.16 million in an effort to decrease the dividends that would have benefitted Lori and her children, and that he took loans and bonuses totaling $875,000 from KDC in order to pay the money he owed Natalie.

The COA concluded these material breaches of the agreement did excuse the estate from its obligation to sell Will’s shares to Dan and KDC.

Dan claimed that despite his and KDC’s material breaches and bad faith, the estate should still be required to sell its shares. However, the appellate court held that Dan’s position is in direct contradiction to well-established Indiana law, as discussed in Wilson v. Lincoln Fed. Sav. Bank, 790 N.E.2d at 1048 (Ind. Ct. App. 2003), that a party in a material breach of a contract cannot seek to enforce the contract against the non-breaching party.•

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  1. by the time anybody gets to such files they will probably have been totally vacuumed anyways. they're pros at this at universities. anything to protect their incomes. Still, a laudable attempt. Let's go for throat though: how about the idea of unionizing football college football players so they can get a fair shake for their work? then if one of the players is a pain in the neck cut them loose instead of protecting them. if that kills the big programs, great, what do they have to do with learning anyways? nada. just another way for universities to rake in the billions even as they skate from paying taxes with their bogus "nonprofit" status.

  2. Um the affidavit from the lawyer is admissible, competent evidence of reasonableness itself. And anybody who had done law work in small claims court would not have blinked at that modest fee. Where do judges come up with this stuff? Somebody is showing a lack of experience and it wasn't the lawyers

  3. My children were taken away a year ago due to drugs, and u struggled to get things on track, and now that I have been passing drug screens for almost 6 months now and not missing visits they have already filed to take my rights away. I need help.....I can't loose my babies. Plz feel free to call if u can help. Sarah at 765-865-7589

  4. Females now rule over every appellate court in Indiana, and from the federal southern district, as well as at the head of many judicial agencies. Give me a break, ladies! Can we men organize guy-only clubs to tell our sob stories about being too sexy for our shirts and not being picked for appellate court openings? Nope, that would be sexist! Ah modernity, such a ball of confusion. https://www.youtube.com/watch?v=QmRsWdK0PRI

  5. LOL thanks Jennifer, thanks to me for reading, but not reading closely enough! I thought about it after posting and realized such is just what was reported. My bad. NOW ... how about reporting who the attorneys were raking in the Purdue alum dollars?

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