The family battle over the southern Indiana amusement park, Holiday World and Splashin’ Safari, could be moving to the Indiana Supreme Court.
Attorneys representing Dan Koch filed a petition to transfer Dec. 5. They argue under a “legitimate reading” of the agreement between the park’s shareholders and the estate of the William Koch Jr., the estate is only entitled payment for William Koch’s shares and cannot be the majority shareholder.
The Koch Development Corp.’s 2002 share purchase and security agreement required the corporation to buy all the shares of common stock whenever a shareholder died. After Will, then the majority owner, passed away in June 2010, his brother, Dan, became owner and operator of Holiday World.
Dan subsequently tendered an offer of $26.9 million for Will’s majority shares. However, Will’s widow charged that Dan had undervalued the shares and the actual purchase price is $32.1 million.
In October, the Indiana Court of Appeals found Dan and KDC materially breached the agreement and, therefore, the estate did not have to sell Will’s shares.
Petitioning for transfer, Dan asserted the Court of Appeals improperly relied on the “first party to breach” doctrine. He argued this doctrine has been repealed by the adoption of Section 242 of the Restatement (Second) of Contracts which expressly calls for contracts to be enforced even when there has been a material breach.
“Under no reasonable interpretation of the Court of Appeals’ Opinion did the court enforce the Agreement,” Dan’s petition stated. “Instead, relying on the ‘first party to breach’ doctrine, the court rewrote the Agreement to provide extra-contractual relief to the Estate, contrary to the expectations of the parties.”
In addition, Dan faulted estate’s continued assertion that he failed to act within the 180-day period imposed by the agreement. He stated that the estate’s position is unfounded and runs counter to Indiana law.
Dan concluded that Indiana law requires the estate to sell Will’s share to him and KDC.
“To rule otherwise, allowing the Estate to keep Will’s stock – and thus majority ownership in KDC – would defeat the clear expectations of the parties of the Agreement and, contrary to the Estate’s position, would grant it an unlawful windfall, because under no legitimate reading of the Agreement is the Estate entitled to anything other than the purchase price of Will’s shares,” the petition states.