North Carolina Business Litigation Report

Mechanical Systems & Services, Inc. v. Carolina Air Solutions, L.L.C., 2003 NCBC 9 (N.C. Super. Ct. Dec. 3, 2003)(Tennille)

Plaintiff sought to enforce the stock repurchase provisions of a shareholders agreement with two former employees, the defendants. The Court found, however, that the price to be paid ($5 for stock with a book value of more than $36,000), and the circumstances under which the defendants had signed the agreement, rendered the transaction unconscionable. The Court further found, however, that there was no mandatory buyback obligation of the plaintiff.

The Court granted summary judgment on plaintiff's claims that the defendants had violated fiduciary duties through their post-termination activities. As low level employees, defendants had no fiduciary duties as a result of their employment.

Nor had defendants violated any trade secret obligations by bidding on a contract where bidding was open to the public.

Full Opinion

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Mack Sperling
Brooks Pierce, LLP
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