Court Opinion

ID: 2978560
Source: CourtListenerOpinion
Date Created: 2015-09-22 18:27:37.258238+00
Date Added: 2024-06-11T11:44:13.277419
License: Public Domain

By order of the Bankruptcy Appellate Panel, the precedential effect
              of this decision is limited to the case and parties pursuant to 6th
              Cir. BAP LBR 8013-1(b). See also 6th Cir. BAP LBR 8010-1(c).

                                  File Name: 09b0008n.06
            BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: JACK V. OAKLEY, et al.,                    )
                                                  )
                  Debtors.                        )
_____________________________________             )
                                                  )
ELIZABETH H. DOUCET, TRUSTEE                      )
and CITIZENS BANK OF LOGAN,                       )
                                                  )
                    Appellees,                    )
                                                  )
       v.                                         )       No. 08-8102
                                                  )
DRYDOCK COAL CO., et al.,                         )
                                                  )
                                                  )
                    Appellants.                   )
                                                  )

                      Appeal from the United States Bankruptcy Court
                     for the Southern District of Ohio, Eastern Division
                     Bankruptcy Case No. 03-59297; Adv. No. 05-2289

                                  Argued: November 3, 2009

                           Decided and Filed: December 2, 2009

  Before: BOSWELL, HARRIS, and SHEA-STONUM, Bankruptcy Appellate Panel Judges.
                            ____________________

                                        COUNSEL

ARGUED: Kenneth C. Johnson, BRICKER & ECKLER LLP, Columbus, Ohio, for Appellants.
William B. Logan, Jr., LUPER, NEIDENTHAL & LOGAN, Columbus, Ohio, for Appellees. ON
BRIEF: Kenneth C. Johnson, Justin W. Ristau, BRICKER & ECKLER LLP, Columbus, Ohio, for
Appellants. William B. Logan, Jr., Kenneth M. Richards, LUPER, NEIDENTHAL & LOGAN,
Columbus, Ohio, Elizabeth H. Doucet, ELIZABETH H. DOUCET & ASSOCIATES, Lake Charles,
Louisiana, for Appellees.
                                      ____________________

                                            OPINION
                                      ____________________

       G. HARVEY BOSWELL, Bankruptcy Appellate Panel Judge. This appeal involves an
alleged lost, written agreement among the shareholders of a closely held family corporation
restricting the transfer or pledge of stock. The dispute stems from Jack V. Oakley’s (“Debtor”)
pledge of stock to Citizens Bank of Logan (“Citizens”) as collateral for a $1 million loan prior to
filing for bankruptcy protection. After the Debtor filed for bankruptcy protection, the chapter 7
trustee (“Trustee”) and Citizens filed an adversary complaint seeking a declaratory judgment that the
alleged agreement restricting pledge of the stock was of no effect. The shareholders filed a
counterclaim seeking judgment that the agreement is valid and that they had the right to purchase
the pledged shares for $400 per share. Following a five day trial, the bankruptcy court found that
the shareholders failed to prove the material terms of the alleged agreement. For the reasons that
follow, we affirm the judgment of the bankruptcy court.

                                     I. ISSUE ON APPEAL

       The issue raised by this appeal is whether the bankruptcy court erred in finding that the
Appellants failed to carry their burden of proving the material terms of their alleged agreement
restricting the transfer or pledge of the stock in their closely held family corporation.

                    II. JURISDICTION AND STANDARD OF REVIEW

       We have jurisdiction to decide this appeal. The United States District Court for the Southern
District of Ohio has authorized appeals to the Panel, and no party to the appeal has timely elected
to have this appeal heard by the district court. 28 U.S.C. §§ 158(b)(6), (c)(1). A final order of the
bankruptcy court may be appealed as of right pursuant to 28 U.S.C. § 158(a)(1). “[A] decision is
ordinarily considered final and appealable under § 1291 [and § 158(a)] only if it ‘ends the litigation
on the merits and leaves nothing for the court to do but execute the judgment.’ ” Quackenbush v.

                                                  2
Allstate Ins. Co., 517 U.S. 706, 712, 116 S. Ct. 1712, 1718 (1996) (quoting Catlin v. United States,
324 U.S. 229, 233, 65 S. Ct. 631, 633-34 (1945)); Wicheff v. Baumgart (In re Wicheff), 215 B.R. 839
(B.A.P. 6th Cir. 1998). The bankruptcy court’s judgment resolved the adversary proceeding on its
merits and is a final, appealable order. See Lyon v. Eiseman (In re Forbes), 372 B.R. 321, 325
(B.A.P. 6th Cir. 2007).

       The court’s findings of fact are reviewed under the clearly erroneous standard. Riverview
Trenton R.R. Co. v. DSC, Ltd. (In re DSC, Ltd.), 486 F.3d 940, 944 (6th Cir. 2007). “A finding of
fact is clearly erroneous ‘when although there is evidence to support it, the reviewing court on the
entire evidence is left with the definite and firm conviction that a mistake has been committed.’ ”
Id. (quoting Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573, 105 S. Ct. 1504 (1985)).

       The bankruptcy court’s legal conclusions are reviewed de novo. Gen. Elec. Credit Equities,
Inc., v. Brice Rd. Devs., LLC (In re Brice Rd. Devs., LLC), 392 B.R. 274 (B.A.P. 6th Cir. 2008). “De
novo means that the appellate court determines the law independently of the trial court’s
determination.” Treinish v. Norwest Bank Minn., N.A. (In re Periandri), 266 B.R. 651, 653 (B.A.P.
6th Cir. 2001) (citations omitted).

                                           III.   FACTS

       In 1940, Jack Oakley’s (“Debtor”) ancestors founded Drydock Coal Company (“Drydock”).
In 1979, the Debtor acquired 100 shares of Drydock from his father. On May 14, 1981, the Debtor
executed the Jack Victor Oakley Trust Agreement (“Trust”), a revocable trust for estate planning
purposes, and transferred his 100 shares to the Trust. His son, Timothy Oakley, was named as the
Trust’s trustee. The Trust provided that upon the death of the Debtor, his shares of stock were to be
transferred to his four sons equally. Following the death of the Debtor’s father later in 1981, the
Debtor acquired an additional 525 shares which he also transferred to the Trust. Upon the death of
the Debtor’s father, the IRS valued the stock at $400 per share for estate tax purposes.

       On October 20, 1981, the Debtor and his four sons entered into a purchase agreement in
which each son purchased 65.625 shares for $400 per share from the Trust. That agreement
contained no restriction on the pledge or transfer of Drydock stock. On that same date, each of the

                                                  3
four sons made a down payment of 10% and signed a promissory note to the Trust for the remaining
90% owed. The promissory notes made no reference to a restriction on the pledge or transfer of
Drydock stock.

       The Appellants (defined below) assert that they also executed a buy-sell agreement on
October 20, 1981, (the “1981 Agreement”) which imposed a lifetime restriction on transfers of any
kind, including pledging stock as security. The 1981 Agreement allegedly stated that upon the death
of any shareholder, Drydock would purchase the shares, and if any shareholder breached the 1981
Agreement, the company had the option to repurchase the shares. Finally, Mark Oakley testified that
the agreement stated that once at least two shareholders died, the agreement automatically
terminated. The Appellants further asserted that the purchase price for shares under the 1981
Agreement was $400 per share.

       On December 15, 1981, Drydock purchased 25 shares from the trust at $400 per share and
transferred them to Margaret Galvin, a long time secretary of Drydock and distant relative of the
family by marriage. The purchase agreement between the Trust and Drydock does not reference any
restrictions on the transfer of Drydock stock. According to Mark Oakley’s testimony, although the
Appellants could not locate any documents, Margaret Galvin agreed to the 1981 Agreement at that
time, and all shareholders agreed to the transfer of stock to her. Following this transaction, the
Debtor’s Trust held a controlling interest of approximately 54% of the shares of Drydock. The
remaining shares were held by the Debtor’s sons, Mark, Gregg, Timothy, and John, and Margaret
Galvin (collectively with Drydock “Appellants”).

       Each of the stock certificates held by the shareholders, which were issued in December, 1981,
contains a legend which reads:

               The shares of stock represented by this certificate are subject to an
               agreement dated October 20, 1981, a copy of which [Drydock] will
               mail to the holder of this certificate, without charge, within five (5)
               days of receipt of a written request therefor, and said shares may not
               be sold, transferred, assigned, pledged, hypothecated, or otherwise
               disposed of, except in strict accordance with the terms of that
               agreement.

                                                 4
(Appellants’ App. at 1343.) Despite searching a large safe maintained by Drydock, Drydock’s files,
the personal files of each of the shareholders, and files of outside counsel and accountants, neither
the original agreement referenced in the stock legend nor any copy of the 1981 Agreement has been
found. While each of the shareholders has maintained their original stock certificates, none of them
maintained a copy of the 1981 Agreement. In fact, each Appellant testified that they have not seen
this agreement since it was executed in 1981. In addition, while minute books of Drydock were
maintained throughout the years, there is a gap in the books between approximately 1977 and 1984.

       On April 24, 1984, Mark Oakley executed a Last Will and Testament in which he directed
that his executor “recognize and comply with the provisions of a certain buy-sell agreement executed
October 20, 1981, by and among myself, my brothers Gregg, Timothy, and John, and said Drydock
Coal Company, concerning said shares, as said buy-sell agreement now reads or as it may be
amended from time to time . . . .” (Appellants’ App. at 1243.) No copy of the 1981 Agreement was
attached to or maintained with this Last Will and Testament.

       In the early 1990s, Drydock was involved in litigation with the United Mine Workers which
Mark Oakley feared threatened the existence of Drydock. In connection with that litigation, Mark
Oakley wrote several letters to Drydock’s counsel, Robin Hoke, two of which were introduced at
trial on the subject adversary proceeding. The first such letter was dated December 11, 1993, and
explained the history and assets of Drydock. In that letter, Mark Oakley stated, in pertinent part:

               Most of these shares [held by the Trust] were purchased by my father
               from the estate of my grandfather for $400.00 (?) per share in 1981
               (actually, he took the shares in lieu of cash of equal value) This estate
               was audited by the I.R.S. He immediately sold to us our shares at the
               price per share of $400.00.
               These shares are all subject to a buy-sell agreement, by and among the
               shareholders and Drydock, at the price of $400.00 per share. (This
               price is subject to modification per the terms of the agreement, but the
               price has never been changed.)

(Appellants’ App. at 1221.) In the second letter, dated February 3, 1994, Mark Oakley again stated
that the shares were subject to a buy-sell agreement, and:

                                                  5
                So that Drydock has the cash to exercise its rights thereunder to
                purchase the trust shares referenced above, it owns and pays the
                premiums on a life insurance policy on [Debtor], face amount
                $250,000, the stated purchase price for the trust shares.

(Appellants’ App. at 1311.)

        On December 30, 1997, the Debtor executed a Memorandum of Trust naming John G.
Oakley as successor trustee of his Trust. No mention of the 1981 Agreement or restriction on
transfer of stock is made in this document. On November 19, 1999, the Debtor executed an
Amended Memorandum of Trust removing Timothy Oakley as trustee, naming himself as trustee,
and naming Timothy Oakley as successor trustee. Once against there was no mention of the 1981
Agreement or restriction on transfer of stock. In addition, he amended the dispositive feature to
provide that 20% of his stock in Drydock would be transferred to his wife, Saranne Oakley, upon
his death with the remaining 80% to be split evenly among his four sons.1

        In April 2000, the Debtor, the Trust, and Cardinal Glenn, Inc., borrowed $1 million from
Citizens Bank of Logan (“Citizens”) as funding for a golf course development. In addition to certain
real estate being pledged as collateral for the loan, the Debtor pledged the Trust’s 337.5 shares of
stock in Drydock as collateral. When he pledged the stock, the Debtor provided Citizens an affidavit
which stated: “I have authority under the [agreement governing the Trust] to pledge the subject stock
as collateral for loan purposes and have, by separate instruments so elected to pledge said common
stock to [Citizens].” (Appellants’ App. at 1231.) Citizens took possession of the Trust’s stock
certificate which contained the legend referencing the 1981 Agreement; however, not until litigation
later ensued did it request a copy of the 1981 Agreement from Drydock.

        At the trial before the bankruptcy court, the Debtor asserted that he never intended to pledge
the stock. According to his testimony, the lawyers and bankers involved in the loan process were

        1
         Witnesses testified to this change in the dispositive feature as reflected on Exhibit L at trial.
This Panel has not been provided with a copy of Exhibit L, but we have gathered from the remainder
of the record that it is another amendment to the Trust which was executed on October 20, 1999.

                                                    6
at his home when he showed them the stock certificate to demonstrate that he owned the stock as an
asset. He did not know that they had taken it. In addition, he asserted that the above quoted
paragraph of the affidavit was not on it when he signed the affidavit although he did not deny signing
the affidavit.2

        On August 3, 2001, the Debtor signed an amendment to the Trust, purporting to give 5% of
his stock, 1% each, to his wife and four sons. The document purporting to effect this amendment
makes no mention of a restriction on the transfer of Drydock stock.

        On August 20, 2001, the Debtor and the Trust filed suit in state court against Citizens for
breach of contract in connection with the loan for the golf course development. Despite numerous
requests in connection with that litigation, the Debtor and Drydock were unable to produce the 1981
Agreement referenced on the stock certificates.

        In connection with that litigation, the shareholders of Drydock attempted to recreate the lost
1981 Agreement. In April 2003 they executed a “restatement” of the lost agreement with the
assistance of attorney David Morrison. Testimony at the trial of this adversary proceeding revealed
that in the early 1980s, the Debtor, an attorney, was also in private law practice. After graduating
from law school, Mark Oakley joined the law practice. Drydock and the law practice shared
common office space. According to the testimony of Mark Oakley, the library of that common office
space contained Volume 1 of the Ohio Transaction Guide Legal Form book. When searching for
the original 1981 Agreement, Mark Oakley found what he asserts is the form which was used by his
brother Gregg Oakley, who had just taken the bar exam in 1981, to draft the 1981 Agreement with
Gregg Oakley’s penciled notations in the margins. This resulted in the use of that form to “restate”
the 1981 Agreement.

        Attorney David Morrison, who has represented Drydock in certain matters, testified regarding
the creation of the 2003 restatement of the 1981 Agreement. According to Morrison’s testimony,
which was given after Drydock granted a limited waiver of the attorney-client privilege to allow him

        2
            The bankruptcy court specifically found this testimony incredible.

                                                   7
to testify at trial, it was he that noticed first that the legend on the Drydock stock certificates was
identical to that in the Ohio Transaction Guide and led him to suggest to Mark Oakley that perhaps
Drydock personnel had used a copy of that book to draft their 1981 Agreement. Mark Oakley then
apparently located Drydock’s copy of the book and found faint pencil markings on it which he
recognized as Gregg Oakley’s handwriting. Mark Oakley then darkened the pencil markings on the
form to copy the pages and fax them to Morrison. Morrison’s testimony also reveals that he worked
exclusively with Mark Oakley on the 2003 document and did not speak with Gregg Oakley, who
allegedly drafted the 1981 Agreement, until after the 2003 document was completed and signed.

        Gregg Oakley testified that while he had no direct recollection of drafting the 1981
Agreement he believed he would have been the one to draft it because he had recently been in law
school and had taken classes on some of the issues raised by the agreement. He recognized his
handwriting in the margins of the form book, but also had no independent recollection of making
the marks. Gregg Oakley further testified that he would have given the book to a secretary to type
the agreement. Certain details were left blank, however, including the purchase price, and he was
unable to recall how the secretary would have known what to include. While Gregg Oakley
acknowledged having drafted another such buy-sell agreement for a client in 1990, he denied that
the marks in the form book could have been related to that work because he would have used a
computer at that time. Finally, Gregg Oakley stated that beyond understanding that he could not
transfer his shares, he had no specific recollection of the terms of the 1981 Agreement.

        The 2003 restatement purports to replicate the original agreement as closely as possible. To
that end, it states:

                 The corporation and the shareholders, except Margaret A. Galvin,
                 who was not a shareholder at the time, made a written agreement,
                 dated October 20, 1981, restricting the transfer of Drydock stock. An
                 amendment to this written agreement was made on December 24,
                 1981, to provide for the acquisition by Margaret A. Galvin of 25
                 shares of Drydock stock, to be held by her subject to all of the

                                                  8
               provisions of the agreement; and this written agreement remains
               otherwise unchanged to this date.3
               After a diligent search, the corporation and its shareholders cannot
               find that agreement, and they cannot precisely remember its exact
               terms.
               The corporation and the shareholders desire to honor their
               commitments under that agreement, whatever those commitments
               may have been, as nearly as possible.
               To that end, the corporation’s management has found a draft form
               for a mandatory buy-sell agreement, with marginal notations that
               were made when the original agreement was prepared, which
               requires that the stock certificates contain a legend that is identical
               to the legend actually appearing on the certificates for the
               corporation’s stock.
               The corporation and the shareholders believe that the lost agreement
               form was in the same form as, or very similar to, the agreement form
               that was found.
               Therefore, in the spirit of compromise, and desiring to honor their
               commitments under the lost agreement as nearly as possible, the
               corporation and the shareholders agree to replace and restate the
               lost agreement with this new form agreement, which is made
               according to the draft agreement form that was found.

(Appellants’ App. at 15.) Included in the provisions of this restated agreement is a prohibition
against transferring, assigning or encumbering the shares.

       On June 20, 2003, the Debtor and his wife, filed a joint voluntary petition for relief under
chapter 11 of the Bankruptcy Code. Their case was converted to chapter 7 on May 17, 2004, and
Elizabeth Doucet (“Trustee”) was appointed chapter 7 trustee. Prior to the filing of this petition, the
Debtor revoked the Trust which held Drydock stock.

       3
         In addition to being unable to locate the 1981 Agreement, the Appellants were unable to
find the amendment to the agreement referenced here or any documents signed by Ms. Galvin in
connection with her acquisition of 25 shares of Drydock stock.

                                                  9
       On June 10, 2005, Citizens and the Trustee initiated an adversary proceeding against all
holders of Drydock stock seeking a declaratory judgment that the provisions of the restatement of
the 1981 Agreement restricting the transfer, assignment or encumbrance of the shares were of no
effect and did not replace the original agreement. The defendants in the adversary proceeding filed
an answer and counterclaim in which they sought an order declaring that the 1981 Agreement was
a valid restriction on the transfer of the pledged stock and gave the defendants the right to purchase
the pledged shares at $400 per share. During the course of the litigation, the Trustee and Citizens
reached an agreement that, if they were unsuccessful, they would split any funds received equally,
and if they were successful, Citizens would receive 80% of proceeds recovered and the Trustee
would receive 20%. On June 19, 2007, the bankruptcy court entered an order approving this
compromise.

       Prior to the trial on the claims of the Trustee and Citizens, the parties entered into certain
stipulations which provided that if the Appellants proved the existence and terms of the 1981
Agreement, they would be entitled to purchase the Debtor’s pledged stock for $135,000. If the
Appellants were unsuccessful, the stock would not be subject to any transfer or pledge restriction,
and the Trustee and Citizens would split any proceeds recovered from the stock per their
compromise.4

       In February 2008, the bankruptcy court held a five day trial solely on the issues of the
existence and terms of the alleged 1981 Agreement. At trial, the Appellants introduced testimony
to demonstrate that they had made a diligent search for the lost 1981 Agreement and secondary

       4
          The pertinent stipulations read: “In the event that the [Appellants] are successful in proving
the existence and terms of the 1981 Agreement, then 1) the stock in the hands of the trustee is subject
to the terms of the agreement as proven, 2) Drydock and its shareholders shall repurchase the
trustee’s shares for the amount of $135,000 pursuant to the terms of the agreement, or for some other
greater amount as may be ordered by the Court, and 3) [Citizens] and the Trustee will split any
recovery as a result of that stock ownership in the manner contemplated by the settlement between
the estate and [Citizens]. In the event that the [Appellants] are not successful in proving the
existence and terms of the 1981 Agreement, then the stock in the hands of the Trustee is not subject
to any restriction imposed by any buy sell agreement, and [Citizens] and the Trustee will split any
recovery as a result of that stock ownership in the manner contemplated by the settlement between
the estate and [Citizens].” (Appellants’ App. at 109-110.)

                                                  10
evidence, in the form of testimony and documents, of the existence and terms of the 1981
Agreement.5 Each of the shareholders of Drydock, including Margaret Galvin by deposition,
testified that they understood there to be a restriction on transfer of their shares of Drydock. None
of them could recall, however, the exact terms of the agreement, nor had they seen it since they
purported to sign it in 1981. Galvin, who was 86 years old at the time of her deposition, had worked
for Drydock from 1943 to 1983 and, while she testified that she understood there was a restriction,
she did not recall ever signing the alleged agreement.

       On November 22, 2008, the bankruptcy court issued a memorandum opinion and judgment
in favor of the Trustee and Citizens. The court found that while the Appellants had established the
existence of some agreement regarding the Drydock stock, they had failed to prove the material terms
of the 1981 Agreement. The Appellants’ timely notice of appeal followed.6

                                        IV.    DISCUSSION

       By virtue of the stipulations entered into prior to trial, the issues before the bankruptcy court,
and now before this Panel, are very narrow: (1) does the 1981 Agreement exist and (2) if the 1981
Agreement exists, what are its material terms? Specifically, did the 1981 Agreement contain a
provision which prohibited the Debtor from pledging the Trust’s stock to Citizens? As the parties

       5
          The Appellants expressly represented to the bankruptcy court that they were not relying
directly on the 2003 document in support of their rights with respect to the pledged stock, but rather
that the 2003 document was secondary evidence of the existence and terms of the 1981 Agreement.
       6
         The Debtor did not join in this appeal. On April 9, 2008, the Debtor, pro se, filed a Motion
for Lack of Jurisdiction and Lack of Standing. On October 22, 2008, the bankruptcy court entered
an order denying the Debtor’s motion. The Debtor, pro se, appealed that order to this Panel. On
June 18, 2009, we issued an opinion affirming the bankruptcy court’s order denying the Debtor’s
motion finding that both the Trustee and Citizens had standing. The Appellants in this appeal also
challenged the standing of Citizens to bring its claims. At oral argument, Appellants’ counsel
conceded that the issue is moot as our previous decision finding that Citizens indeed has standing
is now the law of this case. See Consolidation Coal Co. v. McMahon, 77 F.3d 898, 905 n.5 (6th Cir.
1996) (under the law of the case doctrine, court is ordinarily precluded from re-examining issues
previously decided in the same case); In re The George Worthington Co., 921 F.2d 626, 628-29 (6th
Cir. 1990) (“The purpose of the doctrine of law of the case is to promote judicial comity, the judicial
system’s interest in finality, and the efficient administration of cases.”).

                                                  11
seeking to enforce the alleged transfer or pledge restrictions of the 1981 Agreement, the Appellants
bore the burden of proving, by a preponderance of the evidence, its existence. Woodman Design
Group, Inc. v. Homesteads of Newtown, LLC, 2003 WL 22272596 (D. Conn. Sept. 30, 2003); see
also Lincoln Elec. Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672, 688 (6th Cir. 2000)
(anticipating that Ohio Supreme Court would apply preponderance of evidence standard); Kohler
v. Taco Eds, Inc. (In re Taco Eds, Inc.), 41 B.R. 693, 696 (Bankr. N.D. Ohio 1984).7

       Ohio law does not require that a contract be reduced to writing. The essential elements of
a contract under Ohio law are “an offer, acceptance, contractual capacity, consideration (the
bargained for legal benefit and/or detriment), a manifestation of mutual assent and legality of object
and of consideration.” Minster Farmers Coop. Exch. Co. v. Meyer, 884 N.E.2d 1056, 1061 (Ohio
2008). “The most basic requirement for the formation of a contract is a meeting of the minds or
mutual assent to the terms of an agreement,” and a clear understanding by both parties of the terms
of the agreement and the intention to be bound by those terms. Taco Eds, Inc., 41 B.R. at 695. The
parties to a contract may establish a meeting of the minds through their testimony. See, e.g.,
Giurbino v. Giurbino, 626 N.E.2d 1017, 1026 (Ohio Ct. App. 1993) (“Based on the testimony . . .
we conclude that the requisite meeting of the minds was present to form a contract . . . .”).

       In determining the disputed issue of fact as to whether the 1981 Agreement exists, the
bankruptcy court concluded:

       The [Appellants] presented extensive evidence regarding the meeting of their minds
       back in 1981 on the concept of a buy-sell agreement. Of course, this testimony could
       be viewed as self-serving. Corroborating their testimony, however, are the references
       to the 1981 Agreement in other pre-pledge documents, such as the April 1984 last
       will and testament of Mark Oakley and the letter dated February 3, 1994 from Mark
       Oakley to his attorney, Robin Hoke. The will and the letter could be construed as
       evidence only that Mark Oakley believed that there was a 1981 Agreement and not

       7
         The Ohio Supreme Court has not decided whether the preponderance of evidence or clear
and convincing evidence standard is proper to prove the existence of a contract. The Sixth Circuit
Court of Appeals has anticipated that it would apply the preponderance of evidence standard. In the
absence of binding precedent on the issue, we will follow the Sixth Circuit as did the bankruptcy
court.

                                                 12
       necessarily that their was a meeting of the minds. But also corroborating the
       testimony are the legends on the Drydock stock certificates. Taken together, the
       evidence appears to support the existence of some kind of agreement restricting the
       transfer of some of the stock in Drydock in some manner.
(Appellants’ App. at 270-71.) (emphasis added.) The bankruptcy court’s conclusion is reasonably
supported by the evidence in the record before us. The court did not err in finding that some type
of agreement existed.

       Although a writing is not required to form a contract under Ohio law, the Appellants based
their arguments concerning the contents of the 1981 Agreement upon the existence of a written
contract. Because they could not present the original writing as required by the “best evidence rule”
pursuant to Federal Rule of Evidence 1002, they sought to introduce secondary evidence of the terms
of the 1981 Agreement pursuant to Federal Rule of Evidence 1004(1). While concluding that the
Appellants were entitled to introduce secondary evidence, the bankruptcy court noted that such
evidence must give it

       more to go on than ‘sheer speculation.’ Harrow Prods., Inc. v. Liberty Mut. Ins. Co.,
       64 F.3d 1015, 1021 (6th Cir. 1995) (“[W]e cannot state that a party can never prove
       the terms of [an insurance] policy without a copy of the policy or a reasonable
       facsimile thereof. But the party trying to do so certainly faces a formidable burden.
       Here no jury could find, absent sheer speculation, the scope of coverage . . . and all
       other aspects of the policy, on which coverage often hinges.”)

(Appellants’ App. at 275.) Having so noted, the bankruptcy court concluded that:

               The [Appellants] demonstrated that the brothers probably agreed to
               the concept of a buy-sell agreement in some form. The [Appellants],
               however, failed to carry their burden of proving the material terms of
               that agreement. The testimony showed that one of the Oakleys
               drafted a buy-sell agreement for a client and that the Oakleys were
               successful in locating a copy of that other agreement. Given this, they
               have not shown by a preponderance of the evidence that the marks on
               the form buy-sell agreement introduced into evidence from the Ohio
               Transaction Guide related to the 1981 Agreement. The [Appellants]
               also failed to prove that the Debtor - as opposed to his sons - was

                                                 13
               subject to whatever restrictions were set forth in the 1981 Agreement.
               Mark Oakley’s will referenced an agreement among him, his brothers
               and Drydock, but did not mention the Debtor or the Trust as being
               parties to the agreement. Moreover, the Debtor did not act as though
               he believed that he or the Trust was subject to the 1981 Agreement.
               The Debtor not only pledged the Pledged Stock to Citizens, he signed
               an affidavit representing to Citizens that he had the authority to do so.
               In addition, the documents governing the Trust, some of which the
               Debtor executed after the 1981 Agreement allegedly was created,
               were inconsistent with the Debtor’s purported obligations under the
               1981 Agreement and did not even reference the 1981 Agreement.
(Appellants’ App. at 275-76.) (footnote omitted.)

       Finally, because Mark Oakley stated in his February 3, 1994, letter to his attorney that there
was a life insurance policy on the Debtor, “face amount $250,000, the stated purchase price for the
trust shares,” the bankruptcy court found that the Appellants also failed to prove that the purchase
price for the pledged stock was $400 per share as they asserted. The court concluded that the
Appellants failed “to prove either of the material terms of the 1981 Agreement: price or restriction
on the transfer of shares by the Debtor.” (Appellants’ App. at 277.)

       The Appellants urge this Panel to reverse the bankruptcy court’s factual findings because they
believe that the bankruptcy court did not give “adequate weight to the most probative evidence . . .
the endorsement on the stock certificate itself.” (Appellants’ Br. at 24.) In support of their assertion
that the bankruptcy court misconstrued the evidence in reaching its findings, the Appellants merely
recite the facts and attempt to provide alternative interpretations of the evidence.8 Such alternative
interpretations, or differing views, of the evidence do not constitute clear error. Thurman v. Yellow
Freight Systems, Inc., 90 F.3d 1160, 1166 (6th Cir. 1996) (“Where there are two permissible views

        8
        For example, they attempt to explain that Mark Oakley’s will would not mention the Debtor
or the Trust as parties to the 1981 Agreement because the Debtor was not a shareholder, and it
referenced Timothy Oakley, the trustee of the Trust. The Appellants also attempt to explain that the
Debtor may have signed the affidavit asserting his authority to pledge the stock “[p]erhaps [because
he] was desperate to get the loan closed, and signed whatever [Citizens] put in front of him.”
(Appellants’ Br. at 22-23.) Additionally, they argue that in regard to the purchase price of the shares,
the bankruptcy court ignored or dismissed Mark Oakley’s testimony and focused solely on his letters
to Robin Hoke.

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of the evidence, the factfinder’s choice between them cannot be clearly erroneous.”); Forbes, 372
B.R. at 334 (“When differing views of the evidence are possible, the bankruptcy court’s findings
cannot be clearly erroneous.”). “The clearly erroneous standard does not permit this Panel to
substitute its assessments of credibility in place of the explicit findings made by the bankruptcy
court.” Forbes, 372 B.R. at 334. We give particular deference to the bankruptcy court’s assessments
of credibility because, unlike this Panel, it had the opportunity to observe the testimony of the
witnesses. Anderson, 470 U.S. at 575. As long as the bankruptcy court’s findings are “reasonable
and supported by the evidence,” we may not overturn them. Forbes, 372 B.R. at 334.

       The bankruptcy court’s factual findings in this case are amply supported by the evidence.
The bankruptcy court could not have determined the material terms of the 1981 Agreement absent
sheer speculation. There is no mention of a restriction on transfer or pledge of shares in the purchase
agreement signed by the Debtor’s sons or the promissory notes signed by the sons on the same date
as the alleged 1981 Agreement. There is no mention of a restriction on transfer or pledge of shares
in the purchase agreement for the 25 shares which were purchased for Margaret Galvin. The Debtor
revised his Trust on several occasions after the 1981 Agreement was allegedly signed; however, none
of the Trust revision documents mentions the restriction on transfer or pledge of shares. In fact, the
Debtor revised his Trust to provide that shares of Drydock would transfer to Saranne Oakley upon
the Debtor’s death, a transfer which would be prohibited by the 1981 Agreement as Saranne was
never a shareholder. Additionally, the Debtor’s Trust’s proposed distribution upon his death
contradicted the apparent provisions of the 1981 Agreement regarding the death of shareholders.
Moreover, despite the fact that the Trust was already in place at the time the 1981 Agreement was
signed, nothing in the 1981 Agreement addressed how the Trust’s shares were to be handled as the
agreement apparently addressed only individual shareholders, i.e.: the agreement refers to lifetime
restrictions whereas the Trust has no “lifetime” and it refers to distribution upon the death of a
shareholder whereas the Trust does not “die.” Mark Oakley’s will, which the Appellants assert
supports their position, makes no reference to Margaret Galvin, the Trust, or the Debtor being subject
to the 1981 Agreement.

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        The strongest evidence in support of the bankruptcy court’s finding that the Appellants did
not meet their burden of proving the essential elements of the 1981 Agreement is found in the 2003
restatement itself. The introduction to the restatement, which each of the shareholders signed, states
that “they cannot precisely remember [the original agreement’s] exact terms,” that the shareholders
intend to honor their commitments under the original agreement “whatever those commitments
might have been, as nearly as possible,” that they “believe that the lost agreement form was in the
same form as, or very similar to, the agreement form that was found,” and finally that “in the spirit
of compromise, and desiring to honor their commitments under the lost agreement as nearly as
possible.” This language demonstrates that the Appellants themselves do not know exactly what the
terms of the 1981 Agreement were. Their use of the form book to reconstruct this agreement is also
suspect because Gregg Oakley, who allegedly drafted the original agreement, does not actually recall
making the marks in the book which led the Appellants to use the form in recreating their agreement.
The Appellants simply did not prove, by a preponderance of the evidence, what the terms of the 1981
Agreement were, and in particular, that the 1981 Agreement prohibited the Debtor from pledging
the Trust’s shares as security for his loan from Citizens. To the contrary, the evidence demonstrates
that in recreating the 1981 Agreement, the Appellants themselves were engaging in mere speculation
as to the material terms of the agreement.

        The bankruptcy court’s finding that the Appellants failed to prove that the price per share set
forth in the 1981 Agreement was $400 is also supported by the evidence. The letters from Mark
Oakley to Drydock’s counsel in which he states that the shares are subject to a buy-sell agreement
are indeed inconsistent. One states that the price per share is $400 while the other states that the face
value of the 337.5 shares is $250,000 (approximately $740 per share). Mark Oakley testified that
the $250,000 was an error on his part, and the Appellants assert that the bankruptcy court ignored
this testimony. It is not, however, for this Panel to substitute its assessment of this witness’s
testimony for that of the bankruptcy court. In addition, the letter stating that the price is $400 also
indicates that the price is subject to modification. Moreover, the form book from which the
Appellants worked to reconstruct the agreement did not contain the purchase price and Gregg
Oakley, whose handwriting is in the book, testified “I don’t know what the exact terms of the
purchase price provision would have been because according to the notations in the form book it,

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it’s indicating that that should be left blank.” (Appellants’ App. at 583.) Finally, Timothy Oakley
testified that he had believed that the price was in fact $100, but later realized it was in fact $400,
possibly because that is what his brother included in the 2003 restatement of the agreement.

                                       V. CONCLUSION

       For the foregoing reasons, the judgment of the bankruptcy court is AFFIRMED.

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