Michigan Supreme Court Justices Question Shareholder Redemption Claim

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While the Michigan Court of Appeals ruled in November 2023 that the breach of contract claim could proceed, Boyne’s legal team, led by Kenneth Brooks, countered that the contract didn’t impose any obligation on the company to avoid debt or renegotiate the redemption formula.

The justices also raised concerns about whether Kircher was aware of the company’s debt or if she had agreed to the redemption price formula despite its reliance on debt. Justice Megan Cavanagh emphasized that Kircher had known the formula involved debt, and questioned whether a company could simply be prohibited from taking on debt, potentially reducing the value of the shares.

The case highlights a complex balance between shareholder rights and corporate operations, with both sides asserting differing interpretations of the settlement agreement. The justices have not yet issued a ruling on whether the case can proceed.

The case is titled Kathryn L. Kircher v. Boyne USA Inc., case number 166459, in the Michigan Supreme Court.