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Holiday World widow does not have to sell shares, COA rules

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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 Court of Appeals 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 Court of Appeals, 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 Court of Appeals 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 Court of Appeals 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 Court of Appeals rejected Dan’s argument. It held 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 Court of Appeals 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 Court of Appeals 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 of Appeals 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 Court of Appeals 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 Court of Appeals 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 Court of Appeals 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. Applause, applause, applause ..... but, is this duty to serve the constitutional order not much more incumbent upon the State, whose only aim is to be pure and unadulterated justice, than defense counsel, who is also charged with gaining a result for a client? I agree both are responsible, but it seems to me that the government attorneys bear a burden much heavier than defense counsel .... "“I note, much as we did in Mechling v. State, 16 N.E.3d 1015 (Ind. Ct. App. 2014), trans. denied, that the attorneys representing the State and the defendant are both officers of the court and have a responsibility to correct any obvious errors at the time they are committed."

  2. Do I have to hire an attorney to get co-guardianship of my brother? My father has guardianship and my older sister was his co-guardian until this Dec 2014 when she passed and my father was me to go on as the co-guardian, but funds are limit and we need to get this process taken care of quickly as our fathers health isn't the greatest. So please advise me if there is anyway to do this our self or if it requires a lawyer? Thank you

  3. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  4. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  5. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

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