Rapistan Corp. v. Michaels

511 N.W.2d 918 (1994)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Lear Siegler Holdings acquired Lear Siegler and its subsidiaries which included Rapistan (P). P was a manufacturer and seller of materials handling conveyor equipment and systems. Its marketing focus was in warehouse distribution. Michaels, Tilton, and O'Neill (Ds) were part of the management team for P. Respectively, they were president, vice president of finance, and vice president of marketing and sales. The three resigned to take over Alvey Holdings for the purpose of acquiring Alvey, Inc. a manufacturer of conveyors and palletizers. A palletizer has no application in the warehouse distribution sector of the conveyor marketplace. P sued Ds for breach of fiduciary duties by misappropriation of a corporate opportunity and misuse of confidential information. The trial court found that Ds learned of the opportunity of their own accord and that the acquisition of Alvey was not essential to P and that P had no expectation in Alvey. P appealed.