Opinion ID: 2616451
Heading Depth: 1
Heading Rank: 6

Heading: Refusal to Agree to Construction of Lewistown Mill

Text: Plaintiffs contend that one of the major reasons for the financial failure of MPI has been GP's refusal to approve prompt construction of the Lewistown mill. Plaintiffs insist that a second mill at Lewistown was essential to the efficient utilization of the total timber package purchased from LP. They further contend that the need for this mill was understood from the beginning of MPI's involvement in the LP transaction, and that GP has nevertheless repudiated this understanding and refused to finance the construction of that mill. As a consequence, plaintiffs argue, the contract timber cannot be cut and processed before the contracts with the timber owners expire. We have reviewed the record and have found no evidence of an unconditional agreement to construct the Lewistown mill at any given time. It is clear that construction of the mill was a part of the parties' general plans for MPI. It is also clear, however, that GP has consistently taken the position that the Lewistown mill would be constructed only after the Roundup mill was completed and proved to be satisfactory. When initial results from the Roundup mill were disappointing, GP members of the MPI board refused to approve construction of the Lewistown mill. The parties presented considerable evidence about the reasons for the early losses from operations at the Roundup Mill; it is not necessary for us to determine where the blame for these losses lies. It is enough to conclude, as we do, that there is no evidence that GP was motivated by anything but legitimate business concerns when it refused to approve the construction of a second mill while the first was operating at substantial losses. Perhaps it is true, as plaintiff contends, that it would have been better business judgment to proceed immediately with the construction of both mills. However, GP never agreed unconditionally to proceed with construction of the Lewistown mill at any particular time and there is no showing that it acted in bad faith in refusing to agree to finance its construction. We find no breach of duty in this respect.