978-1285770178 Case Printout Case CPC-27-08

subject Type Homework Help
subject Pages 7
subject Words 2314
subject Authors Roger LeRoy Miller

Unlock document.

This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
page-pf1
v.
Massachusetts citizenship. Wetmore's complaint alleges that Macdonald Page committed professional
We review a Rule 12(b)(6) dismissal de novo, considering all well-pleaded facts in the complaint to be
support of his claim which would entitle him to relief.” To that end, in addition to the acceptance of all
served as President of the Company and managed its daily operations, including production,
follows. In the event of a deadlock, the directors shall hire an accountant at MacDonald Page & Co.,
South Portland, Maine, to determine the value of the outstanding shares. Once the value is reported to
the directors by the accountant, the directors shall call a meeting, each shareholder shall have the right to
buy out the other shareholder(s)' interest, at a price equal to or greater than the price determined by the
page-pf2
page-pf3
page-pf4
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
to sell at a fair price. Once Macdonald Page rendered its negligent undervaluation of the Company, it
was too late-indeed, impossible-for Wetmore to choose to exercise that equally absolute right.
Wetmore's allegations thus offer far more than “pure speculation or conjecture” as to Macdonald Page's
improper valuation being a substantial factor in Wetmore's asserted loss.
It should be added that Wetmore's injury was entirely foreseeable. What Macdonald Page's alleged
misfeasance imposed on Wetmore was precisely the type of bind that shareholders in a close corporation
seek to avoid when they include buy-sell provisions in their agreements. Protections afforded by buy-
sell provisions that set a bidding floor are fully meaningful only if the initial valuation of the company is
performed accurately. Otherwise, as here, the distortion of that base valuation skews the entire process.
“Shareholder's and Officer's Agreement” dated February 1, 1994, paragraph 11.5.5....
To argue that Wetmore's loss was not foreseeable would be disingenuous, given that plain language
confirming Macdonald Page's duty to the Company's shareholders.
In its decision the district court also reasoned that if Macdonald Page's valuation had been higher, there
is no guaranty that Ms. Holden would have made an offer. We too lack an unclouded crystal ball to tell
proof that remain unresolved, but those will require a more developed record-they simply are not before
us at the Rule 12(b)(6) stage.
CONCLUSION
For the reasons that have been stated here we REVERSE the district court's dismissal of Wetmore's
complaint and REMAND for further proceedings consistent with this opinion.
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
to sell at a fair price. Once Macdonald Page rendered its negligent undervaluation of the Company, it
was too late-indeed, impossible-for Wetmore to choose to exercise that equally absolute right.
Wetmore's allegations thus offer far more than “pure speculation or conjecture” as to Macdonald Page's
improper valuation being a substantial factor in Wetmore's asserted loss.
It should be added that Wetmore's injury was entirely foreseeable. What Macdonald Page's alleged
misfeasance imposed on Wetmore was precisely the type of bind that shareholders in a close corporation
seek to avoid when they include buy-sell provisions in their agreements. Protections afforded by buy-
sell provisions that set a bidding floor are fully meaningful only if the initial valuation of the company is
performed accurately. Otherwise, as here, the distortion of that base valuation skews the entire process.
“Shareholder's and Officer's Agreement” dated February 1, 1994, paragraph 11.5.5....
To argue that Wetmore's loss was not foreseeable would be disingenuous, given that plain language
confirming Macdonald Page's duty to the Company's shareholders.
In its decision the district court also reasoned that if Macdonald Page's valuation had been higher, there
is no guaranty that Ms. Holden would have made an offer. We too lack an unclouded crystal ball to tell
proof that remain unresolved, but those will require a more developed record-they simply are not before
us at the Rule 12(b)(6) stage.
CONCLUSION
For the reasons that have been stated here we REVERSE the district court's dismissal of Wetmore's
complaint and REMAND for further proceedings consistent with this opinion.

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.