Durio Extracts $16 Million Minority Interest Settlement
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Steven G. “Buzz” Durio and Travis J. Broussard successfully compelled a $16 million buyout of minority shareholder interests in the matter In re: Port Aggregates, Inc., Case # 14-51580, United States Bankruptcy Court for the Western District of Louisiana.
The action was initially filed under Timothy J. Guinn, et al vs. Port Aggregates, Inc., Suit No. C-108-14, 31st Judicial District Court, Jefferson Davis Parish, Louisiana on February 24, 2014 as a shareholder derivative action for recovery of profits diverted by majority self-dealing under the old Louisiana Business Corporation Law. When the majority shareholder refused corporate records inspection rights, Durio obtained state court ordered five figure monetary sanctions, including attorney’s fees. When the majority shareholder terminated the minority shareholders’ employment, Durio added claims for wrongful termination and warned defendants of a claim for oppression under the new Louisiana Business Corporation Act (“LBCA”) which was to become effective on January 1, 2015. This new LBCA claim for “oppression” entitled the minority to withdraw and require payment of “fair value” for their interests.
Facing trial on the derivative action and the potential oppression claim, the majority filed for a bankruptcy stay of the state court proceedings under Chapter 11 of the U.S. Bankruptcy Code. The minority shareholders immediately contested the bankruptcy filing as a “bad faith” filing, since, according to the majority, the corporation continued to be extremely profitable. Prior to a hearing on their motion to dismiss the bankruptcy, the majority shareholder agreed to pay the minority shareholders approximately $16 million dollars for their combined ownership interests in the company.
The action was initially filed under Timothy J. Guinn, et al vs. Port Aggregates, Inc., Suit No. C-108-14, 31st Judicial District Court, Jefferson Davis Parish, Louisiana on February 24, 2014 as a shareholder derivative action for recovery of profits diverted by majority self-dealing under the old Louisiana Business Corporation Law. When the majority shareholder refused corporate records inspection rights, Durio obtained state court ordered five figure monetary sanctions, including attorney’s fees. When the majority shareholder terminated the minority shareholders’ employment, Durio added claims for wrongful termination and warned defendants of a claim for oppression under the new Louisiana Business Corporation Act (“LBCA”) which was to become effective on January 1, 2015. This new LBCA claim for “oppression” entitled the minority to withdraw and require payment of “fair value” for their interests.
Facing trial on the derivative action and the potential oppression claim, the majority filed for a bankruptcy stay of the state court proceedings under Chapter 11 of the U.S. Bankruptcy Code. The minority shareholders immediately contested the bankruptcy filing as a “bad faith” filing, since, according to the majority, the corporation continued to be extremely profitable. Prior to a hearing on their motion to dismiss the bankruptcy, the majority shareholder agreed to pay the minority shareholders approximately $16 million dollars for their combined ownership interests in the company.