Corporations – breach of fiduciary duty

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Wisconsin Court of Appeals

Civil

Corporations – breach of fiduciary duty

An agreement between shareholders to sell if a buyer offered a certain price was too vague to be enforceable.

“The Estate does not cite to anything in the record that shows Specht and Sheppard made a mutual promise to sell at $12 million dollars, much less what the specifics were. For example, did the two shareholders agree that the $12 million dollars would be all cash? If not, how much of the $12 million did the parties agree could serve as an initial cash payment? What term was acceptable for any financed portion? At what rate of interest? What about the corporate debt and accounts receivable? To the extent that the Estate would argue that none of that matters because the two shareholders had an agreement to sell for $12 million dollars no matter how it got into the shareholders’ hands, or in what form or how long it would take, the thought of two sophisticated businessmen just simply agreeing on a $12 million dollar bottom line, fill in the blanks later, defies reason. The MOU, a nonfinal agreement in its own right, answers none of these questions. The business brokerage agreement answers none of these questions. Thus, as a matter of law, there was no enforceable promise by Specht to sell his stock in Cousins with Sheppard or the Estate for $12 million. That being so, the Estate has not alleged a breach of Specht’s fiduciary duty as a director.”

Affirmed.

Recommended for publication in the official reports.

2011AP2534 Estate of Sheppard v. Specht

Dist. II, Waukesha County, Davis, J., Brown, J.

Attorneys: For Appellant: Graupner, Charles P., Milwaukee; McMorrow, Michael E., Mequon; Fleming, Miriam S., Milwaukee; Nyenhuis, Christopher Edward, Milwaukee; For Respondent: Laing, Dean P., Milwaukee