Drawing of Anger, made possible by Creative Commons, http://goo.gl/pYeceX
Imagine you are a business, a corporation, and you sell off part of your business to one of your executives. After the sale, you are convinced that the buyer, your former fellow shareholder, ripped you off to the tune of millions of dollars by concealing “the true value” of the spun-off asset.
You sue him.
How frustrating would it be to have to pay his legal fees to defend against the lawsuit that you brought against him?
Any Minnesota lawyer experienced in shareholder disputes should be aware of the corporate indemnification statute, which sweeps quite broadly. But Plaintiffs Richard Born and RBA, in a shareholder dispute, apparently cannot accept that the law applies to them. A special litigation committee, hired by Plaintiff RBA, held that Defendant Reinhart was entitled to indemnification by RBA. RBA refused to pay. U.S. Mag. Judge David T. Schultz (D. Minn.) ordered that reimbursement for legal fees be advanced to Mr. Reinhart. RBA still refused to pay.
We’re not sure if all of the heated rhetoric in Defendant Reinhart’s recent brief (calling one of Plaintiff’s arguments “inexcusable” and another as “flailing desperation”) is productive or will be appreciated by U.S. District Court Judge Susan R. Nelson (D. Minn.). On the other hand, we can identify with the frustration when an adversary simply won’t step up and concede a position that has already been rejected repeatedly.