Brief Fact Summary. Plaintiff, Dennis Frandsen, brought this action against Defendant Jenesen-Sundquist Agency, Inc., for the breach of a shareholder agreement, and against Defendant First Wisconsin Corp. for tortious interference with the agreement.
Synopsis of Rule of Law. An agreement that gives a shareholder the right of first refusal does not convey the right to control the sale of assets or the liquidation of the company.
Issue. The issue is whether Defendants breached or tortiously interfered with the agreement between Plaintiff and Jensen-Sundquist that provided him with the right of first refusal on the sale of the majority shares.
Held. The court held that the agreement was not breached because there was never a sale of the majority’s shares to First Wisconsin. The court read the terms of the agreement literally to include only what the agreement allowed for, which is the sale of the majority’s shares. And absent a breach of the agreement, or unfair competition, First Wisconsin can not be liable for tortious interference.
Discussion. The narrow interpretation of the shareholder agreement, as Plaintiff notes, offers Plaintiff very little rights since there are several ways to avoid the actual sale of the majority’s shares while still allowing the significant assets to change hands.