North Carolina Business Litigation Report

Crowder Construction Co. v. Kiser, 1998 NCBC 2 (N.C. Super. Ct. Mar. 10, 1998)(Tennille), aff'd, 134 N.C.App. 190, 517 S.E.2d 178, disc. rev. denied, 351 N.C. 101, 541 S.E.2d 142 (1999)

The Court enforced mandatory buy-sell provisions in a shareholders agreement, noting the importance of such provisions to closely held businesses, and found that adjusted book value had been properly determined. It further found that the price to be paid was not unconscionable, after discussing both procedural and substantive unconscionability. Although the fair market value of the corporation's equipment was substantially higher than its book value, that did not require an adjustment.

The Court rejected the shareholder's argument that the termination of his employment was designed to obtain his stock at a favorable price. It found that if a terminated employee could make out a prima facie case of an improper motivation for the termination, that the employer would then have to show a legitimate business reason for the termination and the timing of the termination. The employee would then have to show that the proferred reason was a pretext.

Full Opinion

Trackbacks (0) Links to blogs that reference this article Trackback URL
http://www.ncbusinesslitigationreport.com/admin/trackback/62554
Comments (0) Read through and enter the discussion with the form at the end
Mack Sperling
Brooks Pierce, LLP
2000 Renaissance Plaza
230 North Elm Street
Greensboro, NC 27401
336.373.8850

1600 Wachovia Capitol Center
150 Fayetteville Street
Raleigh, NC 27601
919.839.0300