Opinion ID: 197195
Heading Depth: 2
Heading Rank: 1

Heading: The Ansin Investment in River Oaks

Text: 4 Lawrence (Larry) Ansin, a Massachusetts fabric manufacturer, met Stephen Simons, then a furniture buyer with a Texas retailer, in the mid-1970s. What began as a business relationship grew, over the next decade, into a friendship. The two men vacationed together and visited each other's homes. 5 In 1987, Simons started his own upholstered furniture company in Mississippi. The company had six original investors in addition to Simons; five of these men, including Thomas Keenum, had been involved with the start-up and eventual IPO of another Mississippi upholstery manufacturer. The sixth investor was Larry Ansin, who was, at that time, the chief executive officer and sole shareholder of Joan Fabrics, a Massachusetts-based company. 6 River Oaks Furniture, Inc. was incorporated in August 1987. Larry Ansin's total investment in the venture was $100,000, for which he was issued a certificate, dated September 1, 1987, for 7,500 shares of common stock. That was 10% of the then-issued shares. Simons owned 30,000 shares and was president of the company; Keenum owned 7,500 shares and was secretary and treasurer. Keenum and Simons were two of the three members of the Board of Directors. 7 In March 1988, the River Oaks investors set up another Mississippi corporation, R-O Realty, Inc., to own real estate which would then be leased to River Oaks. Each of the original investors contributed another $500 in capital and Larry Ansin was issued a share certificate for 437.5 shares in R-O Realty. 8 In 1988, Larry Ansin decided to sell Joan Fabrics. Larry Ansin expected that, as part of such a transaction, he would have to sign a non-competition agreement, which would preclude him from owning stock in another furniture company. Accordingly, Larry Ansin arranged to sell his River Oaks shares to his father, Harold Ansin, for the $100,000 he had originally invested. The Ansins executed a Stock Purchase Agreement dated May 31, 1988. Harold Ansin did not know how many shares he was purchasing, but understood that he was buying his son's entire 10% interest in River Oaks. 9 In April 1992, Larry Ansin learned that he had an inoperable brain tumor. He died on June 24, 1993, before the commencement of this litigation. 10