Frandsen v. Jensen-Sundquist Agency, Inc.

802 F.2d 941 (7th Cir. 1986)

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Nature of the Case

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Facts

Jensen owned all the stock of Jensen-Sundquist (D), a holding company that owned stock in a bank and a small insurance company. Jensen then sold 52 percent of his stock in D to members of his family of which 8% went to Dennis Frandsen (P); who paid $97,000 for his 8% share. A stock purchase agreement was signed that required that if any of the new shareholders were to sell their stock, they must first offer it to P and six other minority shareholders at the same price as may be offered by outsiders. The agreement also called for the stockholders to purchase P's shares if they wanted to sell their shares and P declined to take up the offer to purchase the shares. D began negotiations to sell the bank for $88 per share. That translated to each stockholder of D getting $62 per share. As part of the transaction, all the shareholders of D were required to waive all their rights in the shareholder agreement. All shareholders but P signed the waiver. P then announced that he was exercising his first right of refusal and was buying the shares for $62 a share. The deal was then restructured, and D agreed to sell its shares at $88 per share and then liquidate. All this was done over P's protest. P then sued the majority bloc and the acquiring bank for tortious interference with his contract rights. The court granted summary judgment to D and P appealed.