Lund et al. v. Lund et al., --N.W.2d--, 2019 WL 178461 (Minn. Ct. App. Jan. 14, 2019)
"The Lunds case was complex and hard-fought all the way to the Minnesota Supreme Court. The court decisions in this case are important not just for our client who was resolute in enforcing her rights, but for all minority shareholders in Minnesota closely-held businesses who are treated unfairly." - Janel Dressen
The “Lunds” case involved a family-owned business owned by four siblings. The four Lund siblings family inherited the family-owned business from their grandfather and father. Each of them had different ideas of what should be done with their family wealth. With a long and tortured history of family shareholder discord among the four siblings, three of whom were inactive in the business, including plaintiff Kim Lund, and one of whom was active in the business, defendant Tres Lund, since the death of the company’s founder (Kim Lund’s grandfather) and his son (Kim Lund’s father) in 1992, this case presented a classic and compelling basis for the entry of equitable buyout remedy that would permanently resolve the conflict that plagued the Lund family for decades. Since at least 1992, Anthony Ostlund’s client, Kim Lund, made clear to her siblings her desire that her assets be separated from the family business so that she could engage in charity and pursue her philanthropic goals. The family worked on planning for that event without ever indicating that she could not realize those known and recognized expectations, or that her assets would have to remain invested in the Lund Entities indefinitely. When it came time to fulfill the promises of financial liquidity and independence, however, Kim’s brother, Tres Lund, refused to abide by his promises and took a number of actions to frustrate Kim’s reasonable expectations that he and others on his behalf created. Despite promising to make Kim’s exit strategy a priority, no redemption of her stock occurred nor did the board or Tres Lund come forward with a proposal for the complete redemption of her ownership interests in the Lund entities at a fair price.
After aggressively pursuing evidence needed from the company and Tres Lund, using third-party subpoenas to obtain evidence in our client’s favor, and knocking down multiple roadblocks put up by the defendants, Anthony Ostlund brought a dispositive motion requesting a fair value buyout of Kim’s interests in the Lunds entities on numerous grounds. With evidence in hand, Anthony Ostlund offered the Court several reasons why the court should order a permanent separation and business solution to bring to closure decades of empty promises and unresolved discord and conflict among the family business owners. Anthony Ostlund marshalled decades of evidence together and presented it to the Court in a cohesive, compelling manner focusing on the stated policies of Minnesota law that were enacted to protect minority shareholders whose reasonable expectations are defeated by those in control of a closely-held business, like the Lunds entities.
With a focus on the equities of the case based upon the historical relationship, communications and decades of promises made to Kim Lund, Anthony Ostlund attorneys, Richard Ostlund, Janel Dressen and Shannon Awsumb, were able to secure for their client the largest fair value buyout award on record in Minnesota. On motion, the court granted Kim Lund’s buyout request. Kim was awarded $45,250,000 after a trial on valuation where many valuation issues were vigorously disputed. After a trial, the court also ordered the removal of Kim Lund’s brother, Tres Lund, as a trustee of her trusts and concluded she was the prevailing party in the case. Anthony Ostlund prevailed on appeal, and the Minnesota Supreme Court denied the defendants’ request for discretionary review of the Minnesota Court of Appeals and District Court’s decisions.