Johnson & Bell Shareholder, Mark D. Belongia, successfully resolved a corporate ownership dispute involving a commercial recycling plant, saving their clients nearly $2 million in the process. In this ownership dispute, Mr. Belongia represented two of the four shareholders, each of whom held a 25 percent stake in the company. Following the death of one of the two rival shareholders who were not our clients, the business relationship among the remaining owners began to deteriorate over several years. One of the rival shareholders was the spouse of the decedent shareholder, who assumed his 25 percent share following his death. Disputes arose between the four owners about the valuation of their respective 25 percent stakes, back-owed distributions, back-rent owed and operating issues. Moreover, the two owners not represented by Belongia, sold the building where the company operated without telling our clients. At this point, Belongia was retained to resolve the dispute.
After threatening to litigate the dispute via a demand letter and draft complaint, Belongia convinced the two rival shareholders to mediate the dispute. As part of the mediation, our team requested a valuation of the ownership interests as determined by the company’s accountants in accordance with the language contained in the corporate buy-sell agreement. The two rival shareholders disputed the valuation of the interests, seeking a substantially higher dollar value for their respective interest pursuant to a competing valuation. The two rival owners also claimed back-rent that was owed in excess of $500,000. Our clients claimed the large roof on the plant needed to be replaced at a cost of $300,000. Ultimately, no back rent was paid and the two rival owners agreed to a valuation slightly above the valuation we claimed was correct with a buyout of each their 25 percent stakes in the company. Compared to the rival shareholders’ initial buyout demands, we saved our clients nearly $2 million to bring this dispute to a successful resolution by way of an all-day mediation without the need for any litigation.