650 F.3d 635 (7th Cir. 2011), 10-3278, Denil v. DeBoer, Inc.
|Docket Nº:||10-3278, 10-3475.|
|Citation:||650 F.3d 635|
|Opinion Judge:||EASTERBROOK, Chief Judge.|
|Party Name:||Peter DENIL and Gerald Nardella, Plaintiffs-Appellants, Cross-Appellees, v. DEBOER, INC., et al., Defendants-Appellees, Cross-Appellants.|
|Attorney:||George Burnett (argued), Attorney, Liebmann, Conway, Olejniczak & Jerry, S.C., Green Bay, WI, for Plaintiffs-Appellants, Cross-Appellees. Donald K. Schott, Attorney, Matthew J. Duchemin (argued), and Matthew J. Splitek, Quarles & Brady, Madison, WI, for Defendants-Appellees, Cross-Appellants.|
|Judge Panel:||Before EASTERBROOK, Chief Judge, and BAUER and EVANS, Circuit Judges.|
|Case Date:||May 13, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the Seventh Circuit|
Argued April 1, 2011.
Ronald DeBoer started a trucking business, deBoer Transportation, in 1967. He and other members of his family managed it for 40 years, but by 2007 he wanted to sell the business and retire. (There were then three affiliated firms: deBoer, Inc.; deBoer Transportation Inc.; and deBoer Capital Associates Inc.; we refer to them collectively as deBoer.) After one potential sale fell through, Peter Denil and Gerald Nardella proposed to take over management of the business and prepare it for sale to an outside investor within five years. Ronald DeBoer was receptive. The parties signed two contracts and negotiated toward a third.
The first contract was an employment agreement. It made Denil the CEO of deBoer and Nardella the executive vice president of operations. This contract took effect in October 2008; Denil and Nardella assumed their positions immediately. DeBoer held the right to discharge Denil and Nardella with or without cause, but if the discharge was without cause they were entitled to extra payments.
The second contract, a stock-purchase agreement that also was signed in October 2008, called for Denil to buy 4% of deBoer's stock for $500,000, and for Nardella to buy 2% for $250,000. The closing date was April 15, 2009, or whenever the third contract was signed, if earlier. The parties agreed that failure to purchase the stock by April 15, 2009, would be " cause" for terminating Denil's and Nardella's employment. They also agreed that the signing of the third contract— a buy-sell agreement, common when outsiders acquire shares of family firms or other closely held businesses— would be a condition precedent to the obligation to purchase the 4% and 2% interests. The stock-purchase contract contained a clause in which the parties promised to use their best efforts to conclude the buy-sell contract.
The buy-sell contract was never signed, however. The goal of this negotiation was to agree on how the purchase price would be allocated if deBoer could be sold to an outside buyer. The parties agreed that all equity investors would receive the price they had paid for...
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