Bane v. Ferguson

890 F.2d 11 (7th Cir. 1989)

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Nature of the Case

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Facts

Bane (P) practiced corporate and public utility law as a partner in the firm of Isham et al., which was founded by Abraham Lincoln's son, Robert Todd Lincoln, more than a century ago. In 1985, the firm adopted a noncontributory retirement plan that entitled every retiring partner a pension. The plan provided that payments would end if the firm dissolved without a successor entity. Four months after the plan was adopted, P retired and moved to Florida and began to draw his pension of $27,483 per year. Besides his pension and social security, that was all P had ever planned for. Several months later Isham merged with Reuben & Proctor. The merger proved to be a disaster, and the merged firm was dissolved in April 1988 without a successor. The payment of the pension stopped, and P sued the managing council alleging that they acted unreasonably in merging with Reuben. There was no allegation of fraud nor any deliberate intent to destroy the firm or harm P, but the allegation was simply for negligence in mismanagement. The complaint was dismissed and P appealed.