Balvik v. Sylveste

411 N.W.2d 383 (1987)

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Nature of the Case

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Facts

P and D formed a partnership, Weldon Electric. P contributed $8,000 and a vehicle worth $2,000, and D contributed $25,000 to the partnership's assets. Both partners had an equal vote and equal rights in the management of the business. In 1984, they decided to incorporate. Stock was issued to P and D in proportion to their partnership ownership interests, with Dr receiving 70 percent and P receiving 30 percent of the stock. The now ex-partners and their wives were the four directors of the corporation. The bylaws of the corporation provided that a shareholder was entitled to one vote for each share of stock owned. They also provided that the 'sale of shares of stock by any shareholder shall be as set forth in a 'Buy-Sell Agreement' entered into by the shareholders.' An attorney had prepared a 'stock redemption agreement' for their consideration, but no separate agreements were executed by the parties. Things turned sour and D filed P. P no longer came to work and began drawing unemployment benefits. He subsequently obtained employment at the Ladish Malting Company. P this action seeking Weldon's dissolution or, in the alternative, that he be paid the 'true value' of his stock. P also sought punitive damages. P claimed that D had been guilty of oppression and malice by discharging him from employment with the corporation. D amended the bylaws to reduce the number of directors from four to three, and to reduce the number needed for a quorum from three to two. It does not appear from the record that Weldon has declared a dividend or that P has received any money from the corporation since August 1985. The court ruled for P and held that D’s conduct amounted to oppression. The court ordered Weldon dissolved and D appealed.