Berreman v. West Publishing Company

615 N.W. 2d 362 (2000)

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Nature of the Case

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Facts

In April 1995, P, a 25-year employee of D, told West's Chief Executive Officer, Dwight Opperman, that he intended to retire effective June 1, 1995. P had been promoted to a division head in 1992. In June 1995, P owned 1,600 shares of stock. It was bought through options wherein D could exercise an option to repurchase the stock at book value. The agreement placed no ultimate limitation on P's ability to sell his stock outside the company, but D had always exercised its option to redeem its stock. When P told Dwight Opperman of his plans to retire, Opperman looked at P's records and told him that he should 'do all right.' On June 1, 1995, D redeemed P's stock at the current book value of $2,088.90 per share and paid off a bank loan secured by the stock. P got a check for approximately $2.8 million. Until its sale to Thomson Corporation in 1996, D was a privately held corporation. D had about 200 employee shareholders, 25 non-employee shareholders, and 328,908 shares outstanding. Dwight Opperman, Nelson, and board president Vance Opperman held 23 percent of D's outstanding shares. In 1994, D received unsolicited materials on possible mergers from investment-banking firms Goldman-Sachs and A.G. Edwards, which included information about Thomson Corporation. In response to the increasingly competitive conditions, d's board increased its acquisition fund from $70 million to $300 million in October 1994. On May 15, 1995, the board decided to engage A.G. Edwards to explore D's options. On May 17, 1995, A.G. Edwards representatives met with D's directors. The directors authorized A.G. Edwards to retain another investment-banking firm if necessary. The board met on May 23, 1995. It did not discuss the possibility of selling the company. This meeting was the last board meeting before P's June 1 retirement. On August 29, 1995, D announced to its employees and the public that it had engaged investment bankers and was considering alternative financial options including public offering, entering into a joint venture, joining a strategic partner, recapitalization, sale, or any other available option. Eventually, D was merged with Thompson. Thomson paid $10,445 per share. P sued D in that D owed P a duty to inform him that they were considering selling D. The court dismissed. P appealed.