675 F.3d 646 (7th Cir. 2012), 11-2815, Malik v. Falcon Holdings, LLC
|Citation:||675 F.3d 646|
|Opinion Judge:||EASTERBROOK, Chief Judge.|
|Party Name:||Tariq MALIK, Mahdiur Rahman, and Janice Quinn, Personal Representative of the Estate of Joe Lee Lott, Plaintiffs-Appellants, v. FALCON HOLDINGS, LLC, and Aslam Khan, Defendants-Appellees.|
|Attorney:||Mary Massaron Ross (argued), Attorney, Plunkett & Cooney, Detroit, MI, for Plaintiffs-Appellants. Samuel G. Harrod, IV (argued), Attorney, Meltzer, Purtill & Stelle LLC, Schaumburg, IL, for Defendants-Appellees.|
|Judge Panel:||Before EASTERBROOK, Chief Judge, BAUER, Circuit Judge, and SHADID, District Judge.[*]|
|Case Date:||March 14, 2012|
|Court:||United States Courts of Appeals, Court of Appeals for the Seventh Circuit|
Argued Feb. 21, 2012.
Falcon Holdings was organized in 1999 to own and operate 100 fast-food restaurants. Aslam Khan owned 40% of Falcon's common units. (Falcon is a limited liability company rather than a corporation; ownership is represented by units rather than shares.) The remainder of the common units, and all of the preferred units, were owned by Sentinel Capital Partners II and Omega Partners (collectively " Sentinel" ). According to the plaintiffs, Khan told Falcon's managers that he would acquire full ownership one day, and that, when he did, he would reward the top managers with 50% of Falcon's equity. Plaintiffs say that they accepted lower salaries because they anticipated receiving a stake if Falcon proved to be a success, and that they worked hard to make it prosper (which it did).
Sentinel was bought out in 2005, and Khan became Falcon's sole equity owner. He did not distribute common units to any of the top managers and has denied ever promising that he would. Five of the managers filed this suit. The district court assumed that the evidence in the summary-judgment record would permit a jury to conclude that Khan had promised the plaintiffs an equity stake in Falcon. (Contracts for the sale of stock are not subject to the statute of frauds in Illinois, see 810 ILCS 5/8-113, so the absence of a writing signed by Khan is not dispositive.) Two of the original plaintiffs nonetheless lost on the basis of releases; they have not appealed. The others lost because, the district judge held, they had not adequately estimated the damages they sustained. 2011 WL 2790168, 2011 U.S. Dist. LEXIS 77983 (N.D.Ill. July 15, 2011). These three have appealed. (One has died; his estate's representative has been substituted.)
Plaintiffs offer a simple estimate of damages. They calculate that the price paid for Sentinel's ownership interest (100% of the...
To continue readingFREE SIGN UP