R.D. Clark & Sons, Inc. v. Clark

Citations

• 194 Conn. App. 690

Syllabus

The plaintiff R Co. sought to recover damages from the defendant J, a minority shareholder of R. Co., for alleged breach of fiduciary duty. Since 1984, R Co., which was founded by R, the late father of the individual parties, who are all siblings, has operated as a specialty freight trucking business. When R died, C assumed R's shares of R Co., and the siblings managed R Co.'s operations until they had a falling out in 2011, and J resigned from his positions as an officer and director of R Co. After the plaintiffs commenced the underlying action, J filed a counterclaim seeking dissolution of R Co. on the ground that the individ- ual plaintiffs had engaged in illegal, oppressive and fraudulent conduct to J's detriment. In lieu of dissolution, R Co. elected to purchase J's shares in it at fair value, and the plaintiffs withdrew their complaint. J thereafter filed a second amended counterclaim alleging that R Co. had engaged in oppressive conduct because for many years it provided shareholders with funds to pay federal income tax liabilities incurred as a result of the pass-through of R Co.'s profits to them, but J had not received any such payments for the years of 2012, 2013, and 2014, even though he remained a shareholder. Because the parties could not agree as to the fair value of J's shares or to the terms of R Co.'s purchase of them, those issues were presented to the court, which, after a trial, determined the value of R Co. and the fair value of J's shares, and concluded that because R Co., through its majority shareholders, engaged in oppressive conduct toward J, J's interest in R Co. would not be subject to a minority discount. The court held further evidentiary hearings and determined that J's shares would not be reduced by a marketability discount and that J was entitled to attorney's fees and expert witness fees, and the court ordered R Co. to pay J certain sums. R Co. appealed to this court from the judgment of the trial court determin- ing the fair value