The Court interpreted three stockholders agreements between the Plaintiff and his two Defendant brothers, each respectively dealing with one of three separate companies. The Court held that, as per the terms of two of the agreements, the Plaintiff did not have the right to voluntarily retire before the age of 62 and retain his stock in the companies. Accordingly, he was required to sell back his stock to two of the companies. With regard to the third company at issue, the Plaintiff could retain his interest because the Defendant brothers waived their right to insist upon a resale by knowingly failing to enforce any specific buy-back provisions upon the Plaintiff’s severance of formal relations with the subject company. However, the Court also held that the Defendant brothers, in their capacity as directors, breached their fiduciary duties by granting themselves highly lucrative bonuses. As they stood on both sides of the transaction and could not establish entire fairness, the Defendant brothers were ordered to disgorge the bonuses and reimburse the Plaintiff for associated attorneys’ fees and costs.
