the name is robert sharon and i represent the appellant deborah reza b today we are asking the court to overturn the district court's decision granting the defendant's motion for summary judgment i believe the primary issue in this case is whether or not a partner in a  majority shareholder can coerce and manipulate the minority shareholder in the selling her shares ever adequate will fair market value i'm going to address this by asking the court three simple questions first is there a question of fact as to whether or not deborah recipe was under economic dress when she brief recitation of the facts in this case and james pellon jointly owned a series of entities that were all in the swine industry starting with p s t progressive swine technology in one thousand nine hundred four and they worked together for  several several decades up until may of two thousand and four tires mr pullens hostilities increased dramatically after retirement he did several things such as increasing his salary from one hundred thousand to a million that as a direct causal relationship to decreasing the distributions the letter stating he is going to liquidate p s t he's going to shut off the distributions from all the other entities and he then makes a take it or leave it offer at well below the fair market value of the shares she is coerced into there is force brought to bear and whether that force is unjust and unconscionable or illegal i think or is the operative word here i believe in this dependence briefing they like to suggest yes that we would have to show that there is illegal activity that takes place and that's not simply not the standard the cornice of find that there is a question of fact as to the application that the agreement on its face is unjust unconscionable or illegal looking at the facts yes just to me like i was i was looking at nebraska law i was trying it up having a hard time finding a case where a person who was a business person who was represented by counsel and then entered into an agreement they found  or you were going to case where that's happened while i think that on the same exact facts that this was a business person represented by counsel who entered into an agreement judge i i'm not sure about the igs the exact same facts pattern however i think you can draw parallels to several cases such as city of scottsbluff v waste management where it was a governmental agency clearly represented by counsel and clearly a governmental has some power but the courts still found that they were coerced and forced into a situation that was untenable i think that we covered by the usual government always wins ru with it for forty tons of trash that are piling up every week certainly judge that's much different much more dramatic to arrest them when talking about here well i think that when you have a woman who worked at a business for her entire life and built a business and now she was facing a situation where bankruptcy is is going to is going to occur she had five hundred thousand dollars of annual tax obligation so she was not able to receive distribution addressed well i don't think that she anticipated the mr pill was going to shut off distributions so i think that whether or not she took how she how she followed her taxes i don't think you got a right to do that matter whether minority shareholders anticipates it or not i don't believe that he does have a right to do it i think that the story that they rely on educate me on that one why not well the authority that mr pelham relies on for why a majority shareholders can does all they can decide not to declare dividends they can raise selectively raise salaries and therefore reduce the revenues available to distribute to shareholders and this is just i would certainly agree with you your honor got me corporate law that mr pillin would have the right to do those things if it was done for a legitimate purpose the problem in this case  we don't have juries decide what the legitimate business purpose weather weather weather and time warner and a t and t have a legitimate purpose and wanting them wanting to merge as opposed to what the government thinks it's all that with with respond consumers with respect your honor i wasn't i wasn't drawing an analogy to a legitimate business purpose i was saying that the only purpose for threatening to do these things was to get that r he did not in fact shut off distributions squeezing out minority shareholders without without her saying liability for the law on the circuit is that a majority show just eliminate a minority value of this is in i can either force a liquidation by sale which means it's got to be go out and we're going to sell it either as an ongoing business or are going to sell a piece by piece i mean she has always had the right up until the time she signed she always had the right to say no dice litigate now you say there's arrest which takes way that freedom to litigate in so what exactly was that direct i think that there's multiple aspects of this and it was because the  relationship whereas mr pelan controlled the money and control the distributions they were members of a closely held corporation are so in nebraska members of a corporation oh each other the same fiduciary duties as members of partnerships so there's a duty of relationships of partnerships members of the whole corporation because in the brassica they say i met a closely held corporation is actually a partnership under a different name and that's precisely what we have here we do have the corporate will not go to liquidate for nothing he says that he was a management company the value of of the company was managing all these interrelated entities and so p s t was was a highly cash lucrative if you if you went on liquidation the factual determination that he liquidated p s t he in fact did not what he did is he formed a new entity called family farms one day people showed up to work and they worked for p s t the next day they showed up to work and now they were family farms all the assets all the all saying he's going to liquidate the company but instead he continues operating the company on a daily basis and that's family farms she didn't believe he was god i think that she testifies used terrified she felt like she they don't have they don't have a good opposition they don't have a lot of power it's not according to the city of scottsbluff your honor with respect the court said that ok and when they when you exploit the superior bargaining position that's what shifts over from mere hard bargaining into economic progress what's the evidence that he didn't intend to liquidate it if she didn't do the deal well i think because he said the only the only real difference was between family farms management company to run this i don't think that just because he didn't do it afterwards gets you there with respect your honor i think that i think that if the evidence there's sufficient evidence to show there's a question of fact as to whether or was confronted with the prospect of the possibility of extensive costly minority shareholder litigation she was also faced with the potential for significant adverse tax consequences in light  concerns she made a choice the choice that she made was to sell her stock minority interests in five companies that were given to her by james ten percent in four and five percent one for two million three hundred fifty thousand dollars in addition to transferring her stock for this sum of money she also obtained a full and complete release from any actions that she had while she was employed by these entities by p s t and finally she gave a full and complete release to j this was a difficult choice but let me put this choice in context he was an educated and sophisticated woman she's educated as an accountant and served as an accountant with over twenty in the business in addition to her financial sophistication she retained more than a year before this transaction occurred more than a year before this transaction occurred she retained  firm he has experience in negotiating complex commercial transactions he negotiated in his career deals worth over a billion dollars but it wasn't just mr wells that was representing he also engaged his partner a commercial experienced litigator by the name of william harding they say that t to try to evaluate all options that she had available to her she also had her husband a sophisticated financial person as well throughout the year that she was working with  she evaluated carefully her options and she had options she considered the following options number one her stock at the best price she could negotiate using what other whatever available negotiating techniques she had at her disposal through roger well she had the opportunity the option to stay and fight she was a minority shareholder she could not be compelled to transfer interest so she could stay and fight she had the opportunity to sell her interest to a third party admittedly this would be difficult when you're a minority shareholder in an entity but it is an option that was not only considered but also slightly pursued finally she had the option to seek judicial dissolution of these companies if there was minority oppression there is a clear statute that exist in nebraska to provide this relief to minorit shareholders that they can force judicial dissolution or force the holder to without taking into account minority shareholder discounts all of these options were available to her granted these difficult choices do not equate to economic duress litigation was always an acceptable alternative litigation is uncertain is  expensive but it did exist and it was something that was available to her to consider i'd like to point the court to the to the recent decision of the seventh  a case that is factually very similar to this dispute as well in that case you had two brothers one was a majority shareholder one was a minority shareholder the majority shareholder threatened not to pay tax distributions wanted forces brother out was going to haul him through the courts for a long period of time eventually they reached a negotiated transaction whereby he sold his interest in the company for seventeen million dollars a little over a year and a half later the owner now majority shareholder sold the company for three hundred and thirty six million dollars the minority shareholders interest with over one hundred ten million dollars and that case  good references the choice that someone accused of first degree murder must make when offered a plea deal to avoid the death penalty talked about the older worker who was offered severance and forced to retire consider whether he wants to accept that economic package or whether he wants to pursue discrimination those are the type of choices although difficult do not equate to economic duress there are a couple does one thing that is important to point out in dress has been removed in this case she waited over three years after she obtained two million three hundred fifty thousand dollars to she developed a war chest in order to go back and see if she could get more this should not be allowed there are two things i'd like to have you consider about two point three million and she wants to avoid the release so she can bring claims while in addition to the fruit of the contract right at my that what i would infer is the objective here draft of the stock purchase agreement contained no i had no mention of a release to release was initially brought into the transaction by rasmus lawyer she wanted he wanted raj wells wanted to put in their release when that  two things i'd like to consider is the impact reversal in this case would have been number one yes absolutely you argued that the misrepresentation claim is barred by the release right i don't think the district court thought no i that that question if there is fraud that is not discovered at the time of the release it would not likely be released that would be my understanding we think i would have to agree with  that but the two things to consider if there is a reversible reversal in this case number one what do transactional lawyers representing someone like dr paul what are they going to do to try and avoid this situation coming up in the future  how can they not plan against that due to commercial closings have to turn into what we see in the criminal context when a judge accept a guilty plea and i don't do a lot of criminal work but i'm amazed that when i watch  happy with it you have to go through all those questions and have a porter there that would be absurd and the second thing that you must consider the ramifications of this is what impact is it going to have on any type of settlement in either a commercial litigation or indeed litigation civil litigation and all certainly would she'll the the ability of parties to enter into settlements when they're not happy can you in fact as release is going to be valid it certainly is a legitimate question it is one in which when you have the circumstances that we have here a sophisticated plaintiff a law firm that works on this for over a year to assist her on that and assist her in this transaction now simply be faced with a prospect that can be set aside more than three years later in an attempt to get more money out of a deal and attempt to get another million another two million on their five one whatever remarks thank you and judge to your point the issue of whether or not what happens to the the attack on the contract was issued on the dress you're right that was not something that was at issue under the appeal i think that this was touched on in the original motion to  they moved because they said that there was a lack of tender and the court ruled that tender tender is not necessary if it would be futile and there was also authority that if there was a sum owed the parties agreed that she had some value so she could sue stating that it was under duress and it would just be for the difference in value of the contract and judge erickson to answer your question about a similar situation in the brask i would refer to the gilkerson case where you have a s individual is a vice president of a company who is employed who gets coerced into signing a new employment agreement but with my final eighteen seconds all simply say that the the fact that he said he was shutting off distributions yet he continued giving himself distributions in june july and september that was a fraudulent misrepresentation to induce her into signing the contract and also saying he was going to liquidate p s t when he never in fact it would ask you to reverse and remand for further proceedings thank