Apr 7 2008
Hat tip to SB Sarah who has the scoop. According to the petition, Christina Brashears is a 5% shareholder of Ellora’s Cave beginning in July of 2003. September In 2005, Brashears was terminated from her position as Director, Chief Operating Office and Publisher. Her main claims are as follows:
- She is entitled to a buyout of the 5% of shares.
- She is entitled to distribution of the profits according to the 5% for 2005, 2006, and 2007.
- She has been defamed both in writing and verbally.
1. Buy/Sell Agreement
The Buy/Sell Agreement provides that at the Shareholder’s election (Brashears) upon termination, she can choose to tender (offer) her shares in the following order:
- first to Tina Engler. If Engler refuses, then to
- Engler’s issue (daughter or perhaps husband). If those heirs refuse, then to
- Other shareholders (in this case Patty Marks). If those other shareholders refuse, then to
- The corporation (EC). If the corporation does not choose to purchase them during a certain time, then . . .
- Shareholder (Brashears) can offer them to the free market.
The purchase price for those shares is defined in Paragraph 1.04(a) of the Contract and is either by unanimous agreement or the fair market value of the Company as of August 2005 (last day of the month preceding the instigating event) divided by the number of outstanding shares.
2. Distribution of Profits.
The only contract attached to the Complaint was the Buy/Sell Agreement. There may be another agreement which forms to the terms of dividends shareholders are entitled to. According to the Complaint, however, it is alleged that EC has not paid Brashears “the sums to which Brashears is entitled as a shareholder” despite Brashears paying income tax on sums to which she believes she would be entitled.
Engler, without privilege to do so, has willfully defamed Brashear by libel and slander, including, without limitation, by wrongly accusing her widely and publicly of illegal acts of discrimination, of other improper actions as an officer of EC and of lacking a suitable temperament to conduct business appropriately, thereby injuring Brashear in her trade and occupation, all to Brashear’s damage.
Brashears has asked for the following relief:
- Inspection of the books
- Valuation of her shares and
- Compensatory and Punitive Damages
I’m still digesting this and will be updating this post as the night goes on. Non-legalese summary:
Brashears is saying that she owns 5% shares of EC and hasn’t seen a dime since she was terminated even though she paid taxes on what she believed to be her rightful share. EC is allegedly undervaluing the company by shifting away profits to other corporations and generally not acting with the best interests of the corporation in mind. She doesn’t want to own 5% anymore but wants to be justly paid for her shares. She also wants money damages for the libel and slander of EC employees.
Is it wrong for me to hope that there is a summary judgment in this case filed by someone? I’ll give you the odds of EC filing some type of counter claim at 10 to 1.