The End of the Appellate Road for Lund

In Litigation Process, Minnesota Appellate Decisions, Trusts by Joseph PullLeave a Comment

My previous discussion of the Minnesota Court of Appeals’s opinion in the Lund litigation (here, here, and here) noted that on February 12, 2019, the Lund defendants filed a petition asking the Minnesota Supreme Court to review the decision of the Court of Appeals. On March 27, 2019, the Supreme Court declined to do so. Accordingly, the Court of Appeals’s opinion will remain the final word on the issues it addresses, at least as far as Lund goes.  Only time will tell whether, and how, the appellate courts will develop or modify Lund‘s answers concerning the questions Lund addressed about shareholder oppression, the reasonable expectations of shareholders in closely-held businesses, business fair value, and claims against trustees.

Claims Against Trustees: Lund Again

In Litigation Process, Minnesota Appellate Decisions, Trusts by Joseph PullLeave a Comment

In December 2014, Kim Lund, one of four siblings who shared beneficial ownership of Minnesota’s Lund grocery empire, filed a lawsuit against her brother Tres Lund (the CEO of the business entities), the entities themselves, two directors, and a co-trustee of one of Kim’s trusts. In the action Kim sought to divest her Lund business entity interests, and the court decided it would order a buyout. After a trial in February 2017, the district judge entered an order valuing Kim’s business interests and resolving Kim’s request for the removal of certain trustees from her trusts. The district judge’s decision was appealed. On January 14, 2019, the Minnesota Court of Appeals decided the appeal.[1] The Lund appellate opinion touches numerous issues of interest in Minnesota minority shareholder and trust litigation. This post considers the appellate fate of Kim’s claims against the trustees of her trusts. *    *     *     *     * Along with her shareholder oppression claims, Kim also asked the Hennepin County court to grant her relief concerning co-trustees who managed trusts that owned Kim’s beneficial shares of the Lund business entities. Kim alleged two co-trustees, attorney Stanley Rein and her brother Tres Lund, had breached their fiduciary duties, and she wanted the court to remove Tres and Rein as trustees. No harm, no foul. The trial court rejected Kim’s claims against Tres and Rein for breach of fiduciary duty. The Court of Appeals, without even discussing the wrongdoing that Kim alleged, agreed. Kim had failed to challenge the trial court’s determination that she offered no evidence of damages, and damages are an essential element of a breach of fiduciary duty claim.[2] Without showing damages, a plaintiff cannot prevail on a breach of fiduciary duty claim, no matter what bad acts the defendant did or did not …

Determination of Business Fair Value, Modeled by Lund

In Business Valuation, Minnesota Appellate Decisions, Trusts by Joseph Pull1 Comment

In December 2014, Kim Lund, one of four siblings who shared beneficial ownership of Minnesota’s Lund grocery empire, filed a lawsuit against her brother Tres Lund (the CEO of the business entities), the entities themselves, two directors, and a co-trustee of one of Kim’s trusts. In the action Kim sought to divest her Lund business entity interests, and the court decided it would order a buyout. After a trial in February 2017, the district judge entered an order valuing Kim’s business interests and resolving Kim’s request for the removal of certain trustees from her trusts. The district judge’s decision was appealed. On January 14, 2019, the Minnesota Court of Appeals decided the appeal.[1] The Lund appellate opinion touches numerous issues of interest in Minnesota minority shareholder and trust litigation. This post considers the process of assessing the fair value of a business entity, as illustrated by Lund. *     *     *     *     *

Empty Assurances as Shareholder Oppression

In Minnesota Appellate Decisions, Shareholder Agreements, Shareholder disputes, Trusts by Joseph Pull1 Comment

In December 2014, Kim Lund, one of four siblings who shared beneficial ownership of Minnesota’s Lund grocery empire, filed a lawsuit against her brother Tres Lund (the CEO of the business entities), the entities themselves, two directors, and a co-trustee of one of Kim’s trusts. In the action Kim sought to divest her Lund business entity interests, and the court decided it would order a buyout. After a trial in February 2017, the district judge entered an order valuing Kim’s business interests and resolving Kim’s request for the removal of certain trustees from her trusts. The district judge’s decision was appealed. On January 14, 2019, the Minnesota Court of Appeals decided the appeal.[1] The Lund appellate opinion touches numerous issues of interest in Minnesota minority shareholder and trust litigation. This post considers Lund’s contribution to the definition of oppression through denial of a shareholder’s reasonable expectations. *     *     *     *     *