The Court of Appeals for the Fourth Circuit invalidated a covenant not to compete today, in Lampman v. DeWolff Boberg & Associates, Inc. Along the way, the Court made allusions to Ford Motor Company and Zimbabwe to illustrate the overly broad scope of the agreement.
A couple of caveats first. The opinion is unpublished
The "reasonable expectations" of minority shareholders as to continued employment and continued stock ownership were the issue in Vernon v. Cuomo, 2009 NCBC 6 (N.C. Super. Ct. March 17, 2009), decided yesterday by the North Carolina Business Court.
Judge Tennille ruled after a one week trial that the Plaintiffs did not have a reasonable expectation of continued employment, given extreme animosity that had developed among the shareholders of the Company.
On the dilution issue, however, the Court ruled that Plaintiffs had a reasonable expectation that their ownership interest in the Company would not be diluted, at least not through the means that the Defendants chose to accomplish that dilution. Plaintiffs were restored by the Court to their original ownership position and the Court ordered dissolution of the Company.
The Plaintiffs were two shareholders with a 40% ownership in TriboFilm, Inc., which was developing technology to eliminate silicone as a necessary lubricant in syringes. They had a serious falling out with the Defendants, five other shareholders who controlled the remaining 60% of the Company. The Court described the situation as "intolerable" and "dysfunctional."
The majority stripped the Plaintiffs of their status as employees, officers, and directors. Then, after each faction rejected an offer by the other to be bought out, the Defendants implemented a plan to virtually eliminate the Plaintiffs’ ownership interest. Here’s what happened as the Court described it:
Plaintiffs sued, asserting that their "reasonable expectations" as shareholders to continued employment and continued ownership of their stock had been frustrated. They lost on the first point, but won on the second.Continue Reading Reasonable Expectations Of Minority Shareholders Frustrated By Dilution of Ownership, But Not By Termination Of Employment
A novel issue of work product privilege was decided today by the North Carolina Court of Appeals in Boyce & Isley, PLLC v. Cooper. The Court held that an attorney’s verbatim copying of the text of selected documents at a document production was entitled to the protection of the privilege.
Here are the
You can’t use a compass to draw a circle without working from a fixed point in the center. That basic principle of geometry is what doomed Plaintiff’s effort to enforce a covenant not to compete in Asheboro Paper and Packaging, Inc. v. Dickinson, decided by Judge Schroeder in the Middle District of North Carolina
In the 1930’s, North Carolina began an ad campaign describing the state as "Variety Vacationland." UNC’s Wilson library says that the advertising resulted in a "growing number of visitors to places like Asheville, Pinehurst, and the Outer Banks" and that it "heightened their reputation as excellent vacation areas."
What do places like Pinehurst and the
There weren’t any opinions from the Court of Appeals last week which would have been considered for the legal equivalent of an Oscar, but three cases are worth an honorable mention. They involve arbitration, the statutory requirements for contracting with a municipality, and a healthcare law case involving Certificates of Need.
Arbitration
The arbitration case
If you were about to argue a motion in a case involving a breach of fiduciary duty, and the Judge hearing the motion had written a paper on that very subject, or had been to a presentation about it, wouldn’t you want to know that?
I’m writing this post because if you are looking
In its first significant opinion of the new year, the Business Court interpreted the pricing mechanism contained in a contract between convenience store operator The Pantry and CITGO, its supplier of gasoline. The case, which handed a win to CITGO allowing it to charge higher prices than those urged by The Pantry, is The Pantry,
A successful mediation session ends with a signed document reflecting the settlement, usually the AOC Form "Memorandum of Mediated Settlement," but is often accompanied by an agreement to draft a more comprehensive settlement agreement.
The unpublished Court of Appeals decision this week in Santoni v. Sundown Cove, LLC is a reminder to be careful that
The NC Court of Appeals ruled today on what it means to be a "prevailing party" under N.C. Gen. Stat. §6-21.5 so as to be entitled to recover attorneys’ fees. There was no North Carolina precedent — until now — on this issue.
The effect of the ruling may be that fees under the statute