Jury awards damages to both sides in Link Snacks trial

Tag : buy/sell contract

SHELL LAKE, WI  A jury awarded about $5 million in damagesWednesday, July 9, to Link Snacks and a nearly identical amount tobe paid by the Minong, WI-based company to the target of itslawsuit, the older son who was ousted from the family business inmid-2005.
The 12-member jury returned 19 separate verdicts in The trial began May 27 in Washburn County Circuit Court, pittingJay against the snack food companys two other owners, his fatherJohn E. Jack Link  its founder and CEO  and Jays youngerbrother, Troy, a senior executive. Jack and Troy sued Jay torelinquish his one-third interest as required by a buy-sellagreement he had signed in the mid-1990s. Jay then countersued,seeking well beyond their only offer to date of $34.6 million forhis one-third interest, or the opportunity to buy out his fatherand brother.
After he left the family business as an executive, Jay remained asan owner and director. That didnt stop him from launching his owncompany, Jerky Snack Brands, also based in Minong, that competesdirectly with far larger Link Snacks.
The jury reached its decision in two days after opposing attorneysfinished their closing arguments on Monday, July 7. Among itsverdicts:
" By a 12-1 vote, jurors determined Jay interfered with aprospective contract between Friboi, a Brazil meat company, andLink Snacks. After he left Link Snacks, Jay met with Friboiexecutives to negotiate his own supply deal. The jury said thatinterference was intentional, without justification and damaging.The jury awarded no compensatory damages, but $3.5 million inpunitive damages.
A compensatory award pays for actual damages; punitive damagescompensate for malice.
" Jay did not interfere with negotiations between Link Snacks andanother supplier, International Food Co., nor did he breach hisfiduciary duties with Link Snacks global operations. Jurors,however, found that he maliciously breached his fiduciary duty todo no harm to Link Snacks itself both before and after he left thefirm. The jury ordered compensatory damages of $1, but punitivedamages totaling $1.5 million.
" Jay also breached his departure agreement, damaging the company.The jury awarded $152,000 in damages.
" Both Jack and Troy Link breached their fiduciary duties to Jay asa shareholder. While holding Troy harmless, the jury awarded Jay$736,000 in compensatory damages, and $5 million in punitivedamages, stemming from Jacks malicious actions against his olderson.
Several Link Snacks executives testified during the trial that adysfunctional relationship between Jack and his older son hadbecome the companys No. 1 management issue before Jays departure.
" The jury also dismissed allegations in Jays countersuit thatseveral company executives had breached their fiduciary duty to himas a shareholder.
Even though Washburn County Circuit Court Judge Eugene Harringtonhas dismissed the jury, the case is hardly finished.
Attorneys have 20 days to file motions and Harrington said settingthe value of Jays shares and other major legal issues remain.Harrington is expected to resume the trial without a jury in earlyAugust.
Regan Kohler is a staff reporter for the Washburn County Registerin Shell Lake. Previous Around the Region Articles:
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